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> I’m starting with the top 50 in the S&P so I can get most of the exposure I want but also remove a couple companies I don’t like and increase the weights of a few I believe in. What you’re basically doing is a heavily simplified version of what active managers do. I would not call this “Direct Indexing.” Typically direct indexing implies a few hundred stocks, weighted according to the index without bias. It sometimes includes tax loss harvesting what may create some tracking error but is usually worth the deviation. You mentioned that you don’t have a ton of money to invest. If that is true then a direct indexing approach is likely unhelpful for your situation. You would likely be better served just buying a broad market fund like ITOT, VT, DFAW, SPY, etc.
Universe doesn’t hate u! U just need to b more diversified and stop trying to time the market. Just choose a lo cost S&P 500 index fund or worldwide index fund like AVGE, DFAW or VT. Stock markets make a very small insignificant number of people wealthy in the short term but if u consistently invest 10-15% of your salary over a 30 to 40 yr period in a diversified portfolio and ride out the ups and downs u will b wealthy!! And don’t let your politics influence your investing!
I had the same exact dilemma and went 100% into DFAW which is just a VT alternative with the slightest value tilts
VT. If you wanna get crazy you could look into DFAW…
If you want to back test for longer period, you can use the mutual fund version DGEIX, from the looks of it they are practically the same they use the same fund components at practically the same percentages. For the relatively short time AVGE has been around DGEIX has out performed it but 3 years isn't really much data. For what its worth DGEIX has slightly under performed a 70/30 vtsmx/vgtsx portfolio, which is just total us and total international. For me personally DFAW/DGEIX/AVGE probably all have the same issue that no enough of a value tilt for my liking, especially not enough in scv. I personally went vti/avuv/vxus/avdv to get better scv tilts.
Would you choose it over AVGE? DFAW has an expense ratio that is 2 basis points higher, but that is negligible. Figure it might be better to go with the firm that has more resources/staff for a premium that small. Thought their models might be better than Avantis, but not sure.