This sub is a Vanguard circlejerk
By - ghostwriter85
What alternative would you recommend, and what empirical evidence do you have that it's a better alternative for most investors?
I'm not arguing that every investor should be purely indexed in the same handful of funds. I'm saying it's a great starting point for most investors and most portfolios. A new investor should spend some time with a bland indexed portfolio while they learn how the markets work and track some of their personal investing theories forward instead of backwards.
If you're not a sophisticated investor (per the regulatory definition) odds are you aren't going to meaningful outperform a circlejerk portfolio on a risk adjusted basis over the long run.
I've literally had people tell me that statistically because on average traders lose vs ETF investing you should never invest in anything but a broad index fund. Never. Even. Try.
Personally I have a 24% CAGR for my portfolio over 6 years. it's worth it for me to try because it's working for me, but there are certain people that are convinced nobody should be doing it.
I kinda stopped posting here or even engaging in conversations with ideas because I'm inevitably told I'm an idiot and need to buy VT or VTI.
Haven't the last 6 years been amazing. If someone asks you about investing don't you point them to VTI?
The last 6 years for VTI have been 14%.
Edit: I didn't add CAGR be because I implied it in my other post I know VTI didn't go up 14% in 6 years...
June 2015 VTI was about $107. Currently at $221.
I'm not sure why I'm downvoted. It is 14% CAGR, it compounds on itself.
No downvote from me brother but I'd guess your edit has addressed it.
Fair enough. The recommendations I have heard always start with “For most people”. Not everyone can pick stocks.
Most people here are young and talking about investing for 25-30 years. The last six years have been great for the stock market but that's not going to be the case for every six year chunk. No one has consistently beat the market over the long run.
Nobody beats it every year, but I assure you people beat the market. Is it luck sometimes? For sure, but it happens.
I don't expect to always beat the market, but I typically stay in spaces I know about and can marginally do better quite often.
I think it depends on how much free time someone has and their intelligence. If you are someone who is decent at math and finances, finds learning about investments interesting, and has enough time to follow the market, you can probably do more than index funds.
Most people are dumb, have families, suck at money, or need to pay attention to work more than stock tickers.
For those people, index funds are better than going to a bank and paying something stupid like 1-5% investment fees just to see the investors buying the same index funds that are recommended on here.
Even then its incredibly hard, almost impossible even. If we look at long term, as I remember it a study showed that you would need performance data over 20 years to make a decent judgement if someone can outperform the market realiably and not just as a hit of luck. Especially outperforming in a bull market is nothing surprising really, but where you stand when the recession is over is the question.
Just look at the SPIVA Scorecard.
Most professionals with decades of experience, the brightest analysts and state of the art technology don't even outperform a simple market etf. Granted, partially because their fund size limits their investment possibilities, but chances are that even if you put in hours a day youre most likely won't outperform the market if you don't treat it as your literal job. And even if you do its uncertain.
However, some people like stock picking. Its a hobby for them or they keep themselves informed, research can be really interesting. So even if you have years of outperformance you most likely wont beat the market, but you dont have to. As long as you make profits and you enjoy what youre doing then theres nothing wrong with it. If youre all about maximizing profits though stay with passive investing.
I agree with you 100%.. love that people are getting interested in smart investments. I just made this post to be a jackass and to suggest that people think for themselves when they have time to do so.
It brings to mind an interesting idea
What % of people are going to do their own research after having been told to do their own research on multiple occasions?
I'd love to have more sophisticated discussions about portfolio construction and some of the avenues available for retail tilting and hedging, but I see the value in wading through the "I'm new to investing" posts as I believe most of these people won't do their own research. Admittedly it is the same basic ideas being discussed over and over and over again which is frustrating.
>I'd love to have more sophisticated discussions about portfolio construction and some of the avenues available for retail tilting and hedging
Why not try starting a couple discussions? I've seen some of your comments and I for one would be interested in hearing what you come up with.
That was well worded without a shred of sarcasm, bravo.
Username checks out.
Etf.com sort by Assets under management
That is how all research is done here
You’re thinning about r/bogleheads
Your post is basically as when people shoot baskets in their backyard and yell !!!Michel Jordan !!! And when they score they think for a second they are, it’s child’s play.
People invest in broad market index because it’s smart, evidence based, good way to growth your money and you are still taking stock market risk, which for most smart people is enough !!! And they whant to spend time with their family and not watching fucking stock market all the time.
You do your thing and enjoy it!
What's wrong with advising someone to put the majority of their holdings in a low-cost index fund?
Thats why i only invest in brand new or obscure etfs that you can only trade every few days due to liquidity
Yeah I like that strategy.. and the momentum ones that are leveraged 3X with the meme stocks as primary holdings
Because it works? Is there any benefit to being contrarian for the sake of it?
It’s almost like good ideas become known by other people who also like good ideas. Crazy how that works.
Honestly it’s way better than it was just like 6-9 months ago. Fucking every thread in this subreddit was “ARK! Cathie wood is going to drag us to Mars with bamboo under our finger tips! I wish I could marry her and her children!”
But seriously every thread was pushing ark and you’d try to talk reason to people and you’d be downvoted to hell for saying like “hey, maybe put most of your portfolio into passive index funds and gamble with a smaller portion like 5-10%.” Nope the cathie fans would be on you telling you you’re stupid and there’s a new boss in town. Lol
Things are way better and more rational now. But frankly most people should be 100% indexed honestly.
Just out of curiosity, what blend of indexes would you say is most balanced? Or are you suggesting to go all in on a total market index?
I’m suggesting tilting towards decently researched factors based on fama’s models which are basically like smaller profitable value stocks. Typically it’s just like a emerging market fund with a small cap international and Small cap US fund and a total world index for the majority of your portfolio.
Something like 70% VT, 10% AVDV, 10% AVUV, and 10% VWO.
But unfortunately it’s not typically a new or exciting formula and it’s basically a thing you can set and forget and add bonds as you age. It’s also why most investing subreddits are populated by active investors simply cuz there’s something to talk about.
I also like 70/10/10/10 similar to what you listed.
Yeah, my personal portfolio is almost exactly that except I added 3% into VT and took it out of VWO cuz VWO is so heavily tilted towards China. I just I guess have a small personal bias against them 😅
Use EMXC ... it's VWO without China.
Isn't this just based on Ben Felix's podcast?
Mostly yeah. Ben flex’s stuff is just based on academic research and the fama French models. Again, its nothing new. Factor tilting, which is what this is called, has been around for decades.
Those kids were the worst
Because vanguard etfs are fantastic, and this is an etf sub…
I would recommend listening to ETF podcasts. The amount of inflows into ETF’s keeps growing. And I’m still learning, but it’s probably one of the better ways to make more money over the long term, but I mean index funds don’t hurt, but ETF’s are just different.
Often times a thread here that is asking about something different or unrelated to broad indexes will get highjacked by Bogleheads just repeating the same Vanguard VTI VXUS split. So I see where you're coming from.
Yes that's a good thing. All the best investing advisors (and Warren Buffet) advocate for that 'set it, forget it' type of strategy. Just invest in VTI or VOO and call it a day.
SP500 return between December 31, 1999 and December 31, 2009 was -2.72%. It looks amazing right now but there’s a lot to be said for diversification.
Also, vanguard always has another vanguard fund somewhere near the top % holdings which is sketchy makes me never touch their stuff
Wow what a convenient time frame to select. The price of gold tripled in that time frame, does that mean I should invest 100% of my money in gold?
If you had some in gold though..
Wait, did something happen that year?
Return from dec 09 to now is around 470%, not sure what your point is
If you were forced to liquidate at the end of 09
Try seeing what happens if you put $100 a week from dec 31, 1999 up to dec 31, 2009
What kind of rubbish is this? You literally picked 2 peaks which are obviously not going to show how much they appreciated during that time. You said you were trolling in another comment but I don’t think you are. There’s nothing bad about everyone liking vanguard and recommending the same thing, because it works and is the easiest way to participate in the stock market without having to consistently research and have in depth understandings of everything.
True. I don't get it either. It looks like this sub only exists to tell people to buy VT. Might as well call it r/VT then. It really should be more about discussing obscure or new ETFs and the risks and rewards associated with those ETFs.
It's annoying when people ignore the OP's ask. Every day, someone posts asking for sector specific ETF recommendations because they're bullish on Sector X for insert Reason Y, and invariably the second response will be some boglehead evangelist saying "Blah blah blah, that sector is already priced into VT, so just buy that because I still cling to efficient market hypothesis."
Won't even bother with engaging with Reason Y on the merits, much less posting relevant ETFs. Nope, too busy handing out leaflets asking if you have met their lord and savior, market cap weighting.
It’s going to get dumped soon. Bearish divergence. Rising wedge lowering volume.
OP is not wrong. This is not the Boglehead sub. We should be allowed to and encouraged to talk about ETFs non VOO VTI VT if it’s within the risk tolerance of the redditors on the thread
It used to be an ark circle jerk. Now that those haven't done well for a 6 month period ppl just shilling vt and vti. Which is fine. However, if youre actually looking for in depth thought, analysis or reasoning, reddit not the place. If youre not sure vti is fine, if you want to specialize go ahead, but make sure you have a lot of conviction so that if it doesn't immediately pay off youre not going to sell and change your mind 50x a year. Whats probably more important than the exact etfs your pick is how much you save which isn't talked about on here because its 19 year olds with 300 bucks total that they want to put into something
I got you, sir.
“VT? Nah. Check out FTSAX.”
Thats..the point? Put all your money in a safe etf with a low expense ratio and not worry about it? Please dont tell me youre an ARKK fanboy
Here's a different index etf portfolio just so you don't think everyone's the same:
US: VHT, SCHD, AVUV, VNQ
Int'l: VMI, SCHY, AVDV, DGS, VNQI
But why? Then you have to manage six instead of 2-3
What do you mean by "manage" here? It's not like you have to do anything with them after buying?
Because the whole portfolio is tilted value. Growth is the most overpriced since 2000 so I bought only value. I think inflation is real and permanent and rates are going to 3%. Either inflation or stagflation, in which case the fed will have to jack rates even higher. I think the NASDAQ goes under 10k this year so I don't own any growth. REITs and healthcare are both good in inflation.
IHI is my personal favorite. Check it out if you like healthcare!
It is extension of Bogleheads.
Alt portfolio ideas:
1. 70% DFAU, 30% DFAI
2. 40% SPXL, 20% TQQQ, 40% AGG
I invest in arkk
I tactically trade/allocate levered ETFs (TQQQ, UPRO, UVXY, SVXY, etc), so it’s not 100.0000% VT up in here.
Also, for those that are going to mention tax liability in a taxable account, I’m not that worried about it.
What tax liability? I've been trading levered ETFs too.
Taxes on any realized cap gains during the year, assuming you sold at some point.
But that applies to all other stocks right? Is there something about levered ETFs that's different?
You hold leveraged ETFs not for that long, more buying and selling.
Many people just hold levered ETFs if they're able to stomach the drawdowns.
Totally agree. Vanguard funds aren't even that good. Beating the market should not be the only thing you look for and yet everyone on this sub wants to do that. Also ERs don't matter much in the grand scheme of things. Vanguard funds are overpriced when you can find cheaper and better funds for what you want to achieve.
Want dividend payers? Global X funds are superior
Want total market? ITOT is 3x cheaper and does the same thing as VTI.
Want sector specific? The SPDR series is good. If you want equally weighted ETFs, then Invesco is your fund family for that.
Want thematic ETFs? Vaneck Vectors, Invesco among others shine here as well.
For the vast majority of people, throwing it all into vanguard and focusing on actually working is going to give more returns than fucking around with random tickers. And since you don't know someone's life history just by a reddit thread, we assume the average.
You can get better returns and focus on working by not using Vanguard. And for other funds that people ask about ( VXUS, VTWO etc), there are other families that do it better. You just need to do some research. People do research to find Vanguard; therefore they can do research and "comparison shop" funds to see what works for them.
I'm referring to the price of the two.
The price of a share has no relation to its returns.
No duh. I know that.
For some people, price does matter. If you have only limited Discretionary money (say $500 at a time), common sense would tell you to buy more of the cheaper option of an ETF if available. Therefore a person would be more likely to buy ITOT ($97.59 a share) than VTI ($220 a share) if funds were limited.
\>Also ERs don't matter much in the grand scheme of things.
250K invested over 30 years earning 7 percent. Vanguard fund ER is .03, another fund is .30.
Low Fee Value $2,826,646.17
High Fee Value $2,644,457.84
I'll take the extra $182K.
Change that to .85 for the high fee and the difference is more than a half million dollars.
Low Fee Value $2,826,646.17
High Fee Value $2,309,867.57
Vaginal circle jerk
the whole idea stands on betting on the whole market, what did you expect? Even with the widest variety of etfs pretty much everyone will have the same coverage
Low cost index funds are the smartest way to invest. What were you expecting people to suggest? I personally use fidelity, but their ETFs are basically the same as Vanguard switch even lower fees.