RSP

RZimmerDylanB

I'm also concerned about a looming AI bubble burst. My best educated guess is that it won't happen until early 2027 at the earliest, but the Trump Effect could postpone it until the end of his presidency...Nevertheless, it's probably not a good idea to risk it all at a late stage. When considering my alternatives for my IRA, AI told me to move my money into RSP instead of staying in VTI, stating the following: Why RSP Will Grow While Tech Rots 1. **Earnings Insulated from AI:** If Nvidia or Microsoft drops 40% because their AI profit margins compress, it does not change how many tractors Caterpillar sells, how many planes Union Pacific moves, or how much revenue JPMorgan generates. RSP's growth is driven by these tangible corporate earnings, which remain highly insulated from tech valuations. 2. **Deep Valuation Safety Net:** Right now, the tech-heavy S&P 500 is trading at a dangerous forward P/E ratio over 25x. RSP is trading at a steep historical discount—roughly **17x to 18x forward earnings**. Because RSP is already priced fairly, it has very little valuation "air" to let out, giving it a much firmer floor during a downturn. 3. **The 3-Year Recovery Math:** Historically, when concentrated market bubbles burst (like the 2000 Dot-Com crash), equal-weight and value strategies dramatically outperform. While it took the tech-heavy Nasdaq **15 years** to recover its losses after 2000, equal-weight portfolios broke even and moved into positive, double-digit growth within **24 to 36 months**.

collegefootballfan69

No because of mag 7 will be flat for years buy RSP

Vlisa

Need to buy and hold some RSP to detox

TrueCapitalism

Being heavy in RSP instead of S&P500 will definitely limit your drawdown when the "bubble pops," but until then, your position will likewise not grow as much.

CD274

RSP too

GrokM14232

RSP isn’t just “more diversified”; it’s a persistent tilt toward smaller companies and value, plus a systematic rebalance away from winners. That can outperform when breadth widens or the rate cycle turns, but it can lag for years when mega-cap earnings dominate, as it did through much of the post-2019 period. Fwiw, 20% to 30% RSP alongside VTI is enough to reduce concentration on the margin without making your retirement allocation a big regime bet.

CovTaude588

I’d keep VTI as the core and only add something like 20% RSP if the concentration genuinely bothers you. Equal weighting adds a size tilt, more turnover and higher fees, so it isn’t simply a safer version of VOO. A 60/40 split feels like a fairly large bet on that method, imo.

FreedK70980

I think the main question is whether you want a permanent small-company and value tilt, since RSP isn't just VTI with less tech. A 60% VTI / 40% RSP mix seems like a pretty large active bet for someone mainly trying to index, especially given RSP's higher turnover and expense ratio. fwiw I'd pick a modest allocation I could hold through a decade of underperformance rather than size it around the current tech concentration.

BeuTaude588

RSP is a factor tilt, not simply extra diversification; it adds smaller-company exposure, more turnover and periodic rebalancing. I’d keep VTI as the core and, if concentration still bothers you, cap RSP at 20% and reset it quarterly. In a taxable account, check the capital-gains bill before moving anything.

DanTaude599

Fwiw, 40% RSP is a pretty large active tilt, not just extra diversification, and its higher turnover and expense ratio matter. I’d keep VTI as the core and, if concentration keeps you up at night, cap RSP around 10-20% and rebalance once a year rather than guessing which kind of downturn comes next.

Moldovah

Pretty sure from like 2000 until a couple of years ago, RSP was outperforming the cap-weighted S&P.

steady_compounder

If you are worried about concentration, I would think in terms of what exposure you want to add rather than just swapping one wrapper for another. RSP reduces mega-cap dominance, but it also changes the factor mix and usually comes with a higher fee. A small tilt can make sense, but I would not assume equal weight is automatically the safer version of VTI.

YourChildhood5762

RSP has served me very well this year, especially during the April correction and the June tech meltdown. I have 45% in it. I have 5% XLG so that I don't miss out entirely on those MAG7 riches. It's done well this year (within 2% of VTI and VOO) but 100% would be too much. It's down 20 points to VTI over five years. I don't see the point of balancing it against VTI or VOO. If AI crashes, RSP won't go down as much but it will still go down because those all cover the broad market. I have RSP as protection against a dominant sector correction, but I play it against themes and sectors that are counter to whatever is the dominant risk. So if AI crashed, RSP would go down less and my other holdings would pick up the slack. If you're just going to go VTI / RSP and a little bit of VXUS, I think you're better off just accepting the risk in VTI.

mrmrmrj

Just be aware the fee is higher. There is little reason to split between RSP and VTI. You are massively over diversified. If you think it is unwise to go 100% RSP then don't bother owning it at all. You are either comfortable with mkt cap weightings or you are not.

drazayn99

Might need to move all my money to JEPI, VDC, RSP and PFIX.

deadfishlog

If you’re worried about that switch to RSP from VOO or split the difference

growerdan

Everyone here thinks SPY is so high because of tech. Has anyone looked at RSP? The equally weighted version of SPY that is outperforming it by 3%

Jaredthegoat_

RSP has been slowly going up, so SPY will probably bounce till EOD

co_co_a

| Period | SPY | RSP | Difference (RSP - SPY) | | 6 Months | +11.95% | +9.36% | -2.60% | | YTD | +13.60% | +16.15% | +2.55% | | 1 Year | +22.52% | +22.88% | +0.36% | | 2 Years | +47.99% | +36.84% | -11.16% | | 5 Years | +86.24% | +55.31% | -30.94% | Using total return performance comparisons including dividends with SPY and RSP, the equal-weight S&P 500 has outperformed the cap-weighted version YTD. However, over a period of more than two years, SPY has dramatically outperformed RSP due to the dominance of mega-cap stocks. It's also important to note that RSP has a higher expense ratio (0.20% vs 0.09%) and has historically underperformed during periods of concentrated tech stocks. The key question going forward is whether this represents a sustainable regime shift or a temporary rotation.

noobelore

If you have that money in RSP you would even have noticed the last drawdown. The over all market is very strong, earnings are once again killing it.

CD274

Oh and also, sidenote. RSP has been outperforming VOO and SPY, it's the equal weighted SP500 vs weighted towards megacaps. This isn't normal but it is this year. It has a high expense ratio. I personally switched over to RSP but I trade daily and watch everything closely. VOO is still better to buy and hold and not look for year

IvoryTowerResident

RSP close near all time high as well. Seems like a good signal for market breadth then. QQQ is still off of ATH so it is not just a tech market. What other evidence do you want to see?

IvoryTowerResident

>But beneath the surface, leadership has narrowed. Over the past five trading days, the S&P 500 gained 5.8%, while the equal-weight S&P 500 ETF (RSP) fell 1.9%. That means the average large-cap stock actually underperformed, with a handful of mega-cap names doing most of the lifting. What are you talking about RSP is at ATH while the SPY is not. Breadth is much better than the SMH rally of April - June. Market is healing and we are in a broader bull market

sirzoop

RSP is up 14% YTD. It's not only the mag 7 anymore.

CD274

That's why I switched to RSP in my IRA. It's been outdoing SPY most of the year

dogs_gt_cats

This is a good approach. Alternatively, you can add a small tilt towards an equal-weighted fund that focuses on the same basket. For example, VOO (market cap based) vs RSP (equal weight). Downside is equal weight ends up being a little more expensive due to its active component when it rebalances. Market-cap based midcap is probably cheaper.

movdqa

You could go with RSP which is an equal-weight S&P 500 fund if you are worried about marketcap-based concentration and risk.

PutSpreadDaddi69

LOL, RSP bombing into the close of non-farm payrolls coming up

YourChildhood5762

There is no argument against GOOG except that you shouldn't have more than 10% into it. Maybe a little more if you are more than 50% into a broad index like SPY or VOO or RSP.

AJayHeel

Let's say you invest now, wind up doubling your investment, then the market drops 50%: you're back where you started and still have all your original money. (I doubt the market will double before it drops 50%, but three years of 25% returns would just about double the market, so maybe.) If you want to avoid the tech heavy index funds, you could consider an equal weighted fund, like RSP, or international funds, though some of those are actually fairly tech heavy too due to Korean chip stocks. MSCI treats Korea as an emerging market, however, so you could consider an international fund based on MSCI's definition of developed countries (check out EAFE). You could also keep 10-20% of your funds in something like a government money market. I know Fidelity offers a couple of options for "cash" that actually yields \~3.5%. Schwab and the other brokerages have similar "cash" options. Morgan Housel once wrote that he looks at cash as yielding two benefits: one, it can minimize a drawdown if your investments crash, but two, if or when the crash comes, you have cash available to buy stocks cheap.

MitchCurry

I held SNOW for \~5.5 years and finally let it go in March in favor of others I had higher conviction on. Took a 24% loss while SPY was up 77% and RSP was up 55%. Since the day I sold, SNOW is up 85% and I'd be well in the green if I had held. My highest conviction software stocks right now are IOT (hardware is a big part of their software story), VEEV, GWRE, and TYL. On the cyber side, DDOG and CRWD. I also hold NOW which I don't plan to sell but it's still a level of conviction below my others.

m-fasciano

I only started investing about a month ago, so I'm still learning. I decided to go with Vanguard FTSE ETFs: **VHVG** (developed markets) and **VFEG** (emerging markets) rather than the S&P 500 because I wanted broader global diversification. Reading this discussion has me wondering if I made the right choice or if I should be considering something else, like VOO, RSP, or another ETF altogether. For those of you with more experience, do you think VHVG + VFEG is a solid long-term strategy, or would you suggest a different approach?

Sadpanda9632

The research says equal weight outperforms market weight. If you search on Reddit or Google it will come up and you can decide whether you buy the thesis/math or not. I’ve also been putting more into RSP this year due to mostly being in tech stocks.

Character_Ad_1485

The concentration concern is legitimate but RSP has its own tradeoffs worth thinking through before committing. Equal weighting means you're systematically overweighting smaller S&P constituents and underweighting the largest ones. Historically that's meant more exposure to value and small-cap factors, which have long periods of underperformance versus cap-weighted. RSP lagged SPY pretty significantly during the 2010s tech run precisely because it was underweight the names that were driving everything. The other thing to consider is that the 40% tech concentration you're worried about is partly a reflection of where earnings actually are. These companies are large because they're generating enormous cash flows, not just because of speculation. That's different from the 2000 concentration where valuations were untethered from fundamentals. If the goal is genuine diversification rather than just reducing tech weight, sector ETFs or a tilt toward international developed markets might give you more control over what you're actually adding versus subtracting. RSP diversifies within the S&P but you're still 100% US large cap.

glimsky

RSP is okay, but it bets equally on good and bad companies. I'd say it's better than VOO right now, but I wouldn't pick it over something like DGRO ou SCHD.

VoidMageZero

Yeah that’s what I’m doing. Not selling VOO because then you have to pay taxes but shifting my DCA into RSP more. Plus if the market drops and you want to be more aggressive then you can just go back to VOO. It’s basically like the same idea of going into an international fund, you’re still aiming for equity growth but with less concentration and volatility. If you look at the long term charts you still get decent growth but lose less if the market drops. In the past year RSP and VOO are within like 1% of each other.

Wigglebot23

RSP trades against momentum

VoidMageZero

Yeah it’s not really that diversified anymore especially if you hold Mag 7 stocks individually too, so I agree that buying RSP does give a lot more diversification. Like I said there are days where the market is down because of Mag 7 but RSP is actually up because of all the other stocks outperforming, and vice versa. Worth it to have some imo, might underperform in the long run but will let you sleep better at night if the market drops.

bask_oner

I’ve owned RSP for more than 15 years. It was sold to me back when it was common to have brokers and ETFs were starting to look better than mutual funds. The broker pitched it as a smart play because fee was lower than mutual funds and why should market share dictate amount of investment. This is the same guy who told me to buy AT&T over TSLA about a year after IPO. Thankfully I only took his advice on RSP. Just go buy VOO on Robinhood.

VoidMageZero

Yeah I starting buying some RSP over VOO recently, it sends to be inversely correlated on some days interestingly. Does seem like much better diversification imo without giving up too much yield especially this year.

WordsHappenedHere

13% cash. Mostly ETFs. SPY RSP ROBO. Sold my AAPL before earnings. It was my largest single stock position. Hold a few individual names like IONQ, JOBY, PATH.

ThinkingOfTheOldDays

Not for companies compounding EPS way above gdp rates. Just so happens the mega caps do that.  $RSP has struggled since yesterday 

WordsHappenedHere

Breadth collapsing. RSP and IWM breaking down. Market narrowing. 10yr mooning. Oil mooning. Confidence in the Fed collapsing. Hedge funds going tits up. Memory stocks pumping and dumping 300 points in days. Yea. This is probably where you want to take your profits. Raise cash and wait it out.

No-Improvement3164

I don’t know about that. RSP is red.

95Daphne

Can't say I'm surprised as things did get very far in the Dow/RSP's favor, but oooof these splits in market action. As long as Amazon doesn't tank it (not 100% here), this is probably just the start here.

AcademicStandard3701

Nvidia dumping RSP red you had your clues dump it

coweatyou

NASDAQ is beating RSP by 3.5% today. when were the last time we saw this big of an intraday single sector disconnect?

Own-Recipe5908

More NYSE dec than adv with this much of a pump lol. RSP is actually down half a percent. Rotation away from the rotation, I guess.

Princip

RSP

95Daphne

Well, I think we've gotten our answer, very rudely btw, of how much we can pay attention to the Dow/RSP outperformance, and it is it still doesn't mean a darn thing in the post 2022 era other than the market is full on risk off and it'll be revealed with these indexes ending up reversing.

fledgling66

No, I’m perfectly happy being overweight in CME, Berkshire, ADP, Eli Lilly, and RSP. Other than that it’s just Google and TSM, both of which I bought forever ago.

WordsHappenedHere

Between this cluster fuck of a war and the upcoming midterms, and the rate hike coming. The best moves here are to preserve capital. Which means raise some cash and wait to be a buyer. Dont be a hero. Mango is most definitely going to fuck a lot of shit up between now and November. Probably will send in ICE and other federal agents to scare voters. Expect violence and social unrest. The war will probably get worse because there is no good exit here that doesn’t involve spending a lot of money and more lives to get Iran in line. The rate hike is actually bullish if it gets inflation in line. Let’s see how the market interprets it. The next most likely move here is we lose market Breadth (RSP) and then Apple will fall. That will eventually lead to capitulation.

zg44

Liquidations in Korea are just going to force overseas investors to become even more US/SPY centric. SPY down only 3% despite mass carnage in AI/chips space. RSP, equal weight S&P, at all time highs.

Own-Recipe5908

Yeah, started buying RSP recently, been good. SPYD is doing good too.

Vlisa

everywhere. RSP gains have been great YTD.

Sea_Local2557

what are we talking about? RSP is going up and SPY is hovering at ATH

insightful_pancake

There’s just a big rotation. The winners from earlier this year are now the losers of last 2 months whereas the underperforming majority of the index is up significantly. That’s why the S&P is up despite some of the more famous names downward movement (eg check RSP vs SPY)

Midpoint60

At this moment -- SPY up 0.41% today. RSP up 1.22%. Sector rotation engaged.

tachyonvelocity

You know you’re not diversified enough when you lose a ton of money on a day where RSP, S&P500 equal weight is up 1%, meaning the vast majority of stocks are actually up today. I mean cmon guys, you really thought by buying stocks that have literally gone parabolic 1000 percents you would make a ton of money?  It is kind of funny how some “AI” stocks like Corning has had a literally fastest bubble pop ever, faster than the dot com bubble even

WordsHappenedHere

Allocate some to VIG and RSP. Dividend boomer stocks and equal weight S&P indexes

WordsHappenedHere

Shout out to VIG and RSP. You’ve kept my portfolio green over the past few months.

WordsHappenedHere

Everyone piling into equal weight S&P ticker RSP. The anything but AI trade picking up steam. It’s keeping SPY alive.

Vlisa

RSP up bigly

WordsHappenedHere

RSP carrying the weight of the SPY

WordsHappenedHere

Watch RSP and AAPL. If we lose both of them SPY will leg down hard

Vlisa

RSP already up .72%. Pulling money out of the QQQ jar and spreading it loke butter

ThinkingOfTheOldDays

$RSP, equal weight s&p, has been printing.

CD274

RSP is outdoing SPY too which is unusual

WordsHappenedHere

You’re not watching the right tickers. Look at the equal weight S&P ticker RSP Look at software IGV

WordsHappenedHere

SPY cannot make new highs without Mag7. The other 493 stocks in the S&P 500 don’t have enough weight to move SPY. Look at Friday, RSP was up 1% and SPY flat. We need Lag7 or at least a few of them and semis. Otherwise this shit goes sideways for a while.

nashguitar1

You won big, Congratulations. It is a mathematical certainty that you will lose it all if you keep making those kinds of bets. Pay your taxes, pay your debt, park it in SGOV for a year. Then gradually put it in SPY/RSP/VTI/BRK.B and leave it there for a few decades.

WordsHappenedHere

That’s the kind of thinking that leaves you behind in broadening market. I’m not suggesting you don’t allocate QQQ, but you need at least a 20% allocation to RSP. Good luck.

SoloOutdoor

Ive got three accounts full ported in RSP

WordsHappenedHere

You kids need to learn how to play rotation. Look at the equal weight S&P ticker RSP. It’s been outperforming Lag7 all year. Semi and memory trade is getting crowded and tired. Find other plays. Look at AAPL. It’s a momentum play now. Move on MUtards.

WordsHappenedHere

Take a look at equal weight S&P RSP. The other 493 stocks In the S&P 500 were up 1%

VoidMageZero

Not too late imo, was thinking about switching VOO to RSP

joe4942

* RSP (Equal weight S&P 500): +0.7% * QQQ: -1%

drew-gen-x

$RSP is up +0.68% and only $3 from ATH's. I'd be wild if the equal weight set ATH's while the Mag 7 & semis sold off.

WordsHappenedHere

Jane street isn’t paying you a dime today bears. They will use AAPL and turn NVDA green and crush your puts. That and buying in equal weight RSP

PutSpreadDaddi69

Shit RSP picking up steam

95Daphne

I'm flattish from late May. But I'm kind of aggravated (toned down a bit from the past) because I've seen the way this has been playing out for the past couple years, and it's probably likely that further declines are on tap for the RSP and Dow. It's often looked as if the markets ex-tech will stay intact while tech gets messy, and then it ends up failing to pan out.

Valvador

> But with the tech concentration on SP500, buying half a dozen to a dozen single stocks from different sectors gets you probably a higher diversification than SP500. If you're worried about cap-weighted stocks, there are "equal weight" versions of the S&P500, but then you're basically somewhat betting against the market in general. RSP is an equal weighted S&P500, but the cost goes up from 0.03% to 0.20%. Additionally at least with Cap-Weighted stocks, when people pull out of one industry and pile into the other you re-capture some of that. The math doesn't exactly work out with equal-weighted ETFs, but I guess that's not what you're suggesting. I don't really buy SP500 anyway, I prefer stuff like VT/VTI, although I've been buying a lot more VXUS than VTI over the last few years.

i_empathetic

"Durrr how is SPY not cratering all my momentum stocks are?!?!" RSP +0.8% 👉 https://stockanalysis.com/markets/heatmap/

coweatyou

RSP is up almost 1%

MitchCurry

Sold my SPCX IPO shares as today was the day I could sell without being restricted from future IPOs. 2.97% return vs. SPY at 1.49% and RSP at 2.04%. Another IPO gamble W.

usernametakenagain00

Long RSP and short SPY/long SH should work.

smalltalk2k

If your timeline is 15+ years, the strategy doesn't change: Stay the Course: Keep buying broad, market-cap-weighted index funds (like VTI or VOO, or VT). A crash just means you buy the best companies in the world at a discount. Dial Down Risk if You Can't Sleep: If the volatility genuinely terrifies you, don't try to pick AI-free stocks. Just shift a percentage of your portfolio into fixed income (like short-term Treasuries) or an equal-weight index fund (like RSP) to dilute the mega-cap concentration. Time, not timing, is the ultimate hedge

glimsky

RSP/EUSA are equal weight ETFs that vastly reduce exposure to companies investing heavy in AI. But they also reduce exposure to anything that is successful. You can also check value funds like VTV and dividend to growth funds like VIG and DGRO for reduced exposure to AI. These funds all have pros and cons, but could be a better fit for you. Note: if there's a crash everything is going to drop. That's okay, that's the market cleaning itself up. The question is how long the recovery will take and different funds have different recovery horizons.

WordsHappenedHere

Have you bothered to look at RSP

jemicarus

I'd buy RSP the equal weighted ETF at this point but many will disagree and if you don't want to think about it VOO will be just fine. VT would be better, the all-world index.

PutSpreadDaddi69

RSP near lows is no bueno. Breadth is bad

coweatyou

Tech doesn't rely on oil. The broad market was absolutely hammered today. RSP is down 1%

Solid_Resort6852

I'd add to this - single stock vol is the opposite, it's very elevated. Look at VIXEQ index... it's at a 1 year high. This is likely due to semis. Semi vol (smh, soxx, etc) is in the \~95th %tile. The reason why the VIX isn't at a high is that market correlations are low (ie stock dispersion is high). This perhaps sets up an environment where the market broadens out (RSP>SPY). Recent Pharma and Healthcare outperformance is sort of previewing this. Who knows if it continues. [https://www.cboe.com/us/indices/dashboard/VIXEQ/](https://www.cboe.com/us/indices/dashboard/VIXEQ/)

WordsHappenedHere

Let me explain how this works to the bears. Who still don’t seem to understand. You sell this to buy that. It doesn’t matter if MU tards created a memory bubble. They’ll just pump AAPL GOOG AMZN and MSFT instead. Throw in TSLA as a bonus. That’s already 40% of SPY. Result is a flat or green index while semis get crushed. Money also moves into software, hyperscalers and equal weight RSP. Figure that shit out and stop buying puts.

charlesleestewart

Yes I'm a proud holder of RSP for precisely this reason, the regular S&P, SPY etc funds were all jacked up from tech stock speculation. I think the more accurate term is rotation, not a full sell-off. Rotation from tech into consumer staples, finance etc.The fact that that is happening now makes me a little more confident that the AI crash will move along at a reasonable pace and not create a crisis that will require more money printing.

HeyYoChill

RSP (equal weight S&P) is basically at ATH. So...what sell-off? If you threw portfolio management practices to the wind and got jacked to the tits in single stocks or single sectors, or got overleveraged, this is the chickens coming home to roost. Every reasonable person tells you not to do shit like that, but greed and FOMO really gets people sometimes.

SxeySteve

It's the most concentrated SPX has ever been by a wide margin. But you can fix that by just buying the equal weight $RSP

TheUnvanquishable

RSP is an interesting "diversification" option. Since 2013 is underperforming the SPY, but traditionally it outperforms it, and periods of underperforming are followed by periods or strong overperforming. Now it's at ATH while the SP is not.

Mother_Mousse_8964

Yes, but RSP hit ATH.

Putrid_Leg_1474

Look at equal.weighted s&p, $RSP. It was up substantially and I thing finished at ATH. I think DIA did too. Its couldnt look more like like profit taking and diversifying at all. Dollar wasn't up. It looks like mo ey stayed invested just not in semis and tech