PVAL

EarAppropriate7361

I’m in the minority that I don’t trust market cap weighted index funds. I do 50% active management 50% passive factor-weighted funds. A lot of the studies about active vs passive seem flawed to me. As you say, a lot of active funds are trying to be more defensive than the market, have rules for sector weighting, don’t allow mag 7 over concentration. Personally I think active funds work better with lower AUM for higher flexibility and higher concentration into a small number of holdings to put more weight in their highest conviction picks. But I choose multiple funds with managers that have different investment styles like GRNY, PVAL, CGDV, EMEQ, STRN, and AIS so there’s still diversification despite the concentration. I feel that the expense ratio is the cost I pay to have somebody else choose my stocks rather than picking them myself, rather than an extra expense I’m losing by not investing in an index.  But does the table tilt toward active managers the more people invest in index funds? Yes, but it would require a lot more people to do that. When markets are efficient indexes do well and active struggles. But there could be a breaking point where too much index investing could potentially create opportunities for active investors, but we’re very far away from that being the case. 

PashasMom

Chiming in with the "dump SCHD, DGRO, and BND" folks. These are not what a young person needs to grow their portfolio for retirement. I know you say you like the criteria used to pick the holdings in SCHD and DGRO and you want to favor those types of companies. That's value investing and it can be a good choice. But you have better options than SCHD and DGRO. Check out: RWL, VTV, FFLV, DVY, CGVV, and PVAL. I own PVAL and love it, but think all of these are great value funds. Also, you haven't mentioned this aspect of your plan, but if you haven't already, I would ditch Robinhood for Fidelity, Schwab, or Vanguard. Robinhood may have a great interface and some excellent features, but it also really tends to gamify investing and lure people into risky and advanced stuff that can get them into trouble.

Accomplished_Ruin316

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