By financial nudism I mean that investors need almost nothing to be successful. A simple mix of high-quality stocks and bonds with low fees, like, say,

the iShares Core S&P 500

exchange-traded fund and the

Vanguard Total Bond Market

ETF, each costing 0.03% a year, is enough. It goes without saying you should have ample cash to cover spending in a prolonged emergency—think years, not months.

Let me run through some asset classes that are fine for speculation, or even investment, but that long-term savers don’t truly need. Further down, I’ll answer an email question about investing in India. If you haven’t been watching its economy, you might be surprised at just how quickly it’s replacing China as the darling of emerging markets investment.

You don’t need commodities. That’s just stuff. Stocks are better than stuff because they represent companies that turn stuff into profits. Also, an S&P 500 index fund already includes commodity producers like

Exxon Mobil

and

Newmont
.

You might have heard that commodities are a hedge against inflation, but I have doubts. The gold price, for example, has shown a flimsy relationship with the consumer price index. Speaking of which, the CPI is based nearly two-thirds on services. Why would I use stuff to hedge against services?

You don’t need real estate investment trusts. The S&P 500 already has REITs. And all of its companies own commercial property.

You don’t need options. Those are like betting on a football game. Stocks are like owning a team.

You don’t need private equity. The fees are a shin kick, and the evidence that PE beats stocks is thin. Plus, the S&P 500 includes PE firm shares which their founders and CEOs assure me are a great deal, when they’re not telling me that PE is better than stocks.

You need bonds—not because they’re good for making money, but because they hold their value better than stocks when the market goes kablooey. Ask a financial advisor about the right mix of stocks and bonds, but it’s related more to how soon you might need to spend the money than it is to your age. If you start your working years barely covering family bills, and end them with more than you can spend, your risk tolerance might stay the same or rise as you age. On a related note, you don’t need target-date funds.

You don’t need junk bonds. Those offer near-stock returns for near-stock risk. Just buy stocks.

Life insurance isn’t an investment. It’s based on the same math as casinos; the odds favor the house. Buy some if your death would put a loved one in a bind, but think of it as a penalty you pay until you’re rich enough to self-insure. Favor cheap term insurance. You don’t need annuities, which meld investments with insurance in a way that makes it difficult for customers to judge whether they’re getting a good deal.

You don’t need theme funds, sector funds, closed-end funds, business development companies, master limited partnerships, convertible bonds, preferred stocks, inflation-protected Treasuries, cryptocurrency, or collectibles. I’m leaving out some significant asset classes. You don’t need those, either.

I get that the S&P 500 fund is looking perilously tech-heavy at the moment. But it was tech-heavy a decade ago, before tripling. I’m inclined to stick with it rather than try to outsmart it. My financial nudism does allow for a sliver of small- and mid-cap stocks, like via

Fidelity Extended Market Index

fund, and some developed markets stocks, through, for example,

Schwab International Equity

ETF.

You can skip emerging markets, though. Heresy, I know. But their chief appeal to investors is fast economic growth, and studies show a weak link between that and stock returns, because a country’s economy and its stocks on offer are two different things. China, for example, has been a growth miracle for 30 years, but the

iShares MSCI China

ETF has lost money over that stretch.

That brings me to India. “Is it too late to capitalize on the growth of the Indian economy?” writes an investor named Jeff. He asks about stock picks.

India overtook China in population over the past year, and its stock market is on a tear. If you bought the

iShares MSCI India

ETF a year ago, you’ve beaten the S&P 500 by three points and MSCI China by more than 45. In late 2020, China made up more than 40% of the

MSCI Emerging Markets Index,

and India, less than 10%. Now China is down to 25% and India is approaching 18%. A related aside:

Apple
,

which has made low-end iPhones in India since 2017, now makes high-end ones there and plans to move 25% of production to India by next year.

The Indian stock market is roughly as expensive as the U.S. one relative to earnings, but with faster earnings growth. J.P. Morgan is a fan. Its global markets team cites India’s robust capital spending and rising investor participation, along with more stock issuance and analyst coverage. Its India specialists favor financials, including

ICICI Bank

; autos, including

Tata Motors

; real estate, including

DLF

; consumer staples, including

Dabur India

; and drugs, including

Sun Pharmaceutical Industries
.

By now you know that as a financial nudist, I don’t think that U.S. investors need Indian stocks. A search through S&P 500 earnings-call transcripts and slide decks shows that America’s multinationals are busy selling cookies, soda, tractors, fertilizer, phone chips, movies, and much more across the subcontinent. Europe’s, too. But based on the long run that China’s market had before fizzling, and how I’m not yet hearing every dermatologist, roofer, basketball dad, and balloon artist boast about their India ETF profits, I’m guessing the market there has room to run.

Write to Jack Hough at jack.hough@barrons.com. Follow him on Twitter and subscribe to his Barron’s Streetwise podcast.