Why bother diversified? Why not all in Index SP500?

[RetiredAt49]

Quote:

Originally Posted by F.I.R.E User What about all in for VTSAX and chill?

That’s a solid option. However, because I have a large taxable brokerage account I use VTI (which is VTSAX in ETF format) and VOO and use them as TLH partners. I also have QQQ because I’m a software engineer and feel that the technology sector is going to continue to innovate and perform well in the decades to come.

[F.I.R.E User]

Quote:

Originally Posted by RetiredAt49 That’s a solid option. However, because I have a large taxable brokerage account I use VTI (which is VTSAX in ETF format) and VOO and use them as TLH partners. I also have QQQ because I’m a software engineer and feel that the technology sector is going to continue to innovate and perform well in the decades to come.

VTSAX is mostly technology.

[RetiredAt49]

Quote:

Originally Posted by F.I.R.E User VTSAX is mostly technology.

True but only because many of the technology companies just happen to be some of the largest companies in the US. I like QQQ specifically for the technology sector-specific companies. Also, QQQ’s historical returns have been excellent and greater than VOO or VTI.

YMMW

[Koolau]

Quote:

Originally Posted by RetiredAt49 True but only because many of the technology companies just happen to be some of the largest companies in the US. I like QQQ specifically for the technology sector-specific companies. Also, QQQ’s historical returns have been excellent and greater than VOO or VTI. YMMW

I just can't imagine having all my eggs in one basket - good track record or not. The more diversity, probably the lower the overall returns - over time. BUT at any given moment, diversity is more likely to protect what you have. I prefer that to the opportunity for higher returns most of the time. It's very much a YMMV situation.

[marko]

Oh, to live in a world where the balance is high enough that a 2% T Bill pays all the bills!

[almost there]

A: People like to gamble. And try to beat the house.

[RetiredAt49]

Quote:

Originally Posted by Koolau I just can't imagine having all my eggs in one basket - good track record or not. The more diversity, probably the lower the overall returns - over time. BUT at any given moment, diversity is more likely to protect what you have. I prefer that to the opportunity for higher returns most of the time. It's very much a YMMV situation.

Regarding diversity and having “all eggs in one basket”, VOO is Vanguard’s S&P 500 ETF (and thus 500 individual stocks). VTI is Vanguard’s total US stock market which contains several thousand companies. QQQ has just over 100 technology companies.

Sure, there’s overlap across those 3 ETF’s and given the “weighting”, the “bigger” ones have more exposure. However, holding thousands of individual stocks (with 3 ETF’s) is not “holding all my eggs in one basket”.

[Markola]

Quote:

Originally Posted by Koolau I just can't imagine having all my eggs in one basket - good track record or not. The more diversity, probably the lower the overall returns - over time. BUT at any given moment, diversity is more likely to protect what you have. I prefer that to the opportunity for higher returns most of the time. It's very much a YMMV situation.

+1. Vanguard has us in a globally-diversified array of bond and stock index funds, which, last I tallied, exposes us to some 27,000 securities. Seems like one could approximate that with just two funds, the Vanguard World Stock and the World Bond fund, but who am I to argue with our Vanguard CFP?

[Spanky]

Quote:

Originally Posted by tutan If you have enough to live on or have the risk tolerance to take in large market drops, yes just put it all in S&P 500 or total stock market. Big market downturns such as the one in 2000 still scare me so I prefer 50% in stocks and the rest in bonds, gold, cash.

+1 -- I do not have the stomach for a 20+ percent decline.

[Koolau]

Quote:

Originally Posted by marko Oh, to live in a world where the balance is high enough that a 2% T Bill pays all the bills!

Years ago, I read a book by Zvi Bodie who recommended (IIRC) to place most of your stash into TIPS. At the time he wrote the book, they were paying 3% over inflation. Had I read the book earlier, I just might have done that. Of course, now, Tips are basically paying inflation IIRC. I haven't looked for a while as I've had little interest.

But, that would be kinda nice - 3% over inflation. I could live on that!

[soylentgreen]

Quote:

Originally Posted by RetiredAt49 That’s a solid option. However, because I have a large taxable brokerage account I use VTI (which is VTSAX in ETF format) and VOO and use them as TLH partners. I also have QQQ because I’m a software engineer and feel that the technology sector is going to continue to innovate and perform well in the decades to come.

What is the Fidelity equivalent of VTSAX (ETF) ?

[RetiredAt49]

Quote:

Originally Posted by soylentgreen What is the Fidelity equivalent of VTSAX (ETF) ?

I’m not sure but my accounts are with Fidelity and you can buy Vanguard ETF’s on Fidelity’s platform. VTI is the total US stock market index ETF.

[audreyh1]

Quote:

Originally Posted by soylentgreen What is the Fidelity equivalent of VTSAX (ETF) ?

That would be FSKAX. Fidelity doesn’t do ETFs.

[target2019]

Quote:

Originally Posted by soylentgreen What is the Fidelity equivalent of VTSAX (ETF) ?

iShares Core S&P Total US Stock Market ETF (ITOT) https://www.fidelity.com/etfs/ishares

[Phroig]

Quote:

Originally Posted by audreyh1 That would be FSKAX. Fidelity doesn’t do ETFs.

Also FZROX. Fidelity has several ETFs, just none that track major broad stock indexes.

[G-Man]

Quote:

Originally Posted by RetiredAt49 I’m not sure but my accounts are with Fidelity and you can buy Vanguard ETF’s on Fidelity’s platform. VTI is the total US stock market index ETF.

Is there an extra cost for purchasing Vanguard ETF's/Mutual Funds within Fidelity?

[RetiredAt49]

Quote:

Originally Posted by G-Man Is there an extra cost for purchasing Vanguard ETF's/Mutual Funds within Fidelity?

Nope it’s 100% free. I also have algorithmic day trading accounts with other brokers like TD Ameritrade and my algo leverages ETF’s (like VOO) and it’s 100% free as well. My favorite ETF’s for algo trading are TQQQ and SQQQ because TQQQ is a triple leveraged ETF that tracks QQQ and SQQQ is the inverse of TQQQ.

[yakers]

Quote:

Originally Posted by Markola +1. Vanguard has us in a globally-diversified array of bond and stock index funds, which, last I tallied, exposes us to some 27,000 securities. Seems like one could approximate that with just two funds, the Vanguard World Stock and the World Bond fund, but who am I to argue with our Vanguard CFP?

To me that is not unreasonable, over a long enough period of time should work for investors and retirees in withdrawal but I have become uncomfortable with BND/IBND for fixed income without finding a single fund to replace them. So I have ibonds, MM, some TIPs and my TSP G fund (no CDs right now) and balanced funds like VG W&W. When the BND 12 month yield to catch up with its current monthly yield I would go back to BND and maybe go back to sleep for the rest of my now shortening investment horizon.

[mickeyd]

Quote:

I view both my pension and VA disability as the equivalent of a large portfolio of government bonds.

Same here, however I do not consider them as bonds. Because they are not bonds. Did you consider your military pay as bonds? Probably not. Same deal. BTW, thanks for your service.

[Koolau]

Quote:

Originally Posted by mickeyd Same here, however I do not consider them as bonds. Because they are not bonds. Did you consider your military pay as bonds? Probably not. Same deal. BTW, thanks for your service.

Think of them as bond-like or just ballast for equities. In any case, they are "safe" and "reliable" income producers which mean (to some of us) we can take a bigger stake in equities. As always, we all have our ways of looking at things so YMMV.