VFINX
VANGUARD 500 INDEX FUND INVESTOR SHARES
Mentions (24Hr)
0.00% Today
Reddit Posts
Let's go! For most, the best investment route is to just purchase a S&P500 index fund/ETF and hold on (*while adding to it often and extra when markets are in a down-cycle). Vanguard's VOO and VFINX have low expense ratios % and are great choices! VTI / VTSMX are also good (total market) options.
Let's go! For most, the best investment route is to just purchase a S&P500 index fund/ETF and hold on (*while adding to it often and extra when markets are in a down-cycle). Vanguard's VOO and VFINX have low expense ratios % and are great choices! VTI / VTSMX are also good (total market) options.
Let's go! For most, the best investment route is to just purchase a S&P500 index fund/ETF and hold on (*while adding to it often and extra when markets are in a down-cycle). Vanguard's VOO and VFINX have low expense ratios % and are great choices! VTI / VTSMX are also good (total market) options.
Can anyone explain why SSO and SPUU produce their (similar) gains in totally different ways?
Is there something I'm missing? Leverage ETFs seem great.
Rate My Portfolio! Meant for low risk and diversification with decent returns.
Mentions
VOO and chill will beat 95% of active investors over 10+ year periods. I wish I had done that 100% from the start (well, VFINX in my case, starting in 1997). Despite my best efforts at trading stocks, options and ETFs, my best investment has been the S&P 500 fund and it's what got me to financial independence at age 54.
Great position to be in! I think the biggest thing for me would be getting that $30k un-invested cash, into some investments. The thing that stands out to me is TRULX just looks like an expensive and slightly under-performing S&P 500 fund. Can't see a good reason to hold onto that. If nothing else you could buy a lower-ER S&P fund. Performance: https://totalrealreturns.com/s/TRULX,VFINX The Blue Chip Growth fund is interesting. Up until ~2009 it pretty much just tracked the S&P; no better. 2009 to 2021 it did great. Looks like a new manager (Paul Greene) took over in 2021. https://totalrealreturns.com/s/TRBCX,VFINX But, if you looked at performance since 2009, you'd be as well off or better just going NASDAQ index: https://totalrealreturns.com/s/TRBCX,VFINX,QQQ?start=2009-06-01
Only by virtue of that last bit of uptick over the past year. Look longer: https://totalrealreturns.com/n/VFINX,FKUTX? To be overweight in utilities in a defensive/short-term account? Sure; I do that. Less volatility and draw-down, less economically sensitive. For a 30-40 year time horizon? Makes no sense to me to be overweight in defensive sectors.
Pay off debt, put some in Roth IRA then put the rest in a Vanguard Index Fund. VFINX or similar.
[https://totalrealreturns.com/s/VFINX,AEM,KGC](https://totalrealreturns.com/s/VFINX,AEM,KGC)
I see Ben's been reading my posts (I've made the point about DFSCX vs VFINX repeatedly for example recently). He of course leaves out some important points I've been making, such as that the "academic research" was made at the behest of DFA, and DFA paid its authors millions. Trust the experts, not the DFA salesmen on this stuff.
Just FYI here's a chart of 2000 to 2012. VFINX for the S&P 500, TPINX for bonds, NAESX for small cap and VFINX for international. https://imgur.com/a/s-p-500-2000-to-2012-XXkJTOx
Just FYI here's a chart of 2000 to 2012. VFINX for the S&P 500, TPINX for bonds, NAESX for small cap and VFINX for international. https://imgur.com/a/s-p-500-2000-to-2012-XXkJTOx
Ditto that I'd swap out the large cap growth fund for the S&P 500. Growth stocks have had a dynamite decade, but it may not last. These things move in big long cycles that takes years to play out. Make sure you're not fighting last year's battles. I disagree with everyone recommending 100% S&P 500. They are probably young and have never experienced a long periods of time when the S&P 500 will be the worst performing option in your 401k. IMO you want a healthy percentage of the overall investments in small cap stocks, international stocks and bonds. See this chart for the years 2000 to 2012, which uses VFINX for the S&P 500, TPINX for bonds, NAESX for small cap and VFINX for international. https://imgur.com/a/s-p-500-2000-to-2012-XXkJTOx
your TDF is fine. leave it alone, keep investing. just FYI, what you're doing is called "returns chasing" or "performance chasing." you're sort of assuming performance of the last 10 years will somehow predict the next 10 years. but that's rarely what happens with investing. I made these charts recently on Morningstar to illustrate the point. There are few ETFs with long enough histories, so I used mutual funds that were popular in this era.from 1989 to 2000, the S&P 500 was by far the best performing option. Chart uses VFINX for the S&P 500, TPINX for bonds, NAESX for small cap and VFINX for international. https://imgur.com/a/s-p-500-1989-to-2000-atg1a3Q but 2000 to 2012, because The S&P 500 was by far the worst performer. https://imgur.com/a/s-p-500-2000-to-2012-XXkJTOx In the US small caps and mid caps beat large caps from 1995 to 2015. https://contrarianoutlook.com/wp-content/uploads/2016/09/SPY-Midcap-Smallcap-20yr-Chart.png and your plan has only tiny international holdings, but from 1975 to 2020, an international developed markets index beat the S&P 500 over 40% of years. https://www.blackrock.com/us/financial-professionals/literature/investor-education/why-bother-with-international-stocks.pdf and the US was the 5th best performing developed market from 2001 to 2020, and nations 6-10 underperformed the US by less than 1%/ year average. https://topforeignstocks.com/wp-content/uploads/2021/09/Single-Country-Stock-market-Performance-From-2001-to-2020-934x1024.png
Like I said, look at a chart of VEUSX versus some S&P index fund or ETF; they follow each other and are reasonably highly correlated. Or, you can use a tool like this: https://www.portfoliovisualizer.com/asset-correlations Put in VFIAX and VEUSX. The closer the correlation coefficient is to 1.00, the more two funds trend with each other. VFINX and VEURX allow for a longer time period, and the rolling correlation plot at the bottom is insightful. That until the late 90's there was a looser correlation, but as of late—especially in downturns following 2008 and 2020—the correlation is > 0.9. That all to say that VEUSX is not great protection against US market movements.
VFIAX did and VFINX before that (the predecessors to VOO)
VFIAX did and VFINX before that (the predecessors to VOO)
VFIAX did and VFINX before that (the predecessors to VOO)
Some companies, like Vanguard, have multiple versions of a fund with different fees, so the more expensive version of the mutual fund may slightly underperform the ETF. VOO's expense ratio is 0.03%; VFIAX's expense ratio is 0.04% compared to 0.14% for VFINX.
>This kind of growth for an S&P 500 etf can’t be sustainable, right? right. >but historically, would you be expecting a correction any time soon? I expect a correction *eventually*. I don't dare assume it will happen *soon*. It could start next month, or might need 3 years to correct. But it will correct, eventually. if we expect the long-term average inflation-adjusted return to be ~7-8%, that implies a period of *above average* returns will be followed by a period of *below average* returns. here's a historical example: look at long-term data from VFINX, which goes back to the 1970s: https://finance.yahoo.com/quote/VFINX/performance/ performance in the 1990s was *well above* average. but then from 2000-2012, performance was *well below* average. from 2000 to 2012, VIIIX a mutual fund equivalent of VTV, averaged under 1% a year due to several crashes in that period. https://imgur.com/a/s-p-500-vs-total-market-index-yZjkS1r
Here are some screenshots that show the return differences for Vanguard 500 Index Investor (VFINX) returns from Jan 1977 through Oct 2024 (almost 48 years) showing both reinvested dividends and inflation adjusted returns. https://imgur.com/a/IEQoXBf Final Balance (CAGR) starting with $10,000 Initial Balance: * Reinvest dividends & not inflation adjusted = $1,758,115 (11.41%) * Reinvest dividends & inflation adjusted = $324,522 (7.55%) * Don't reinvest dividends & not inflation adjusted = $357,726 (7.77%) * Don't reinvest dividends & inflation adjusted = $66,031 (4.03%) Hope that helps.
You’re not wrong. But there are so many factors at play. As some people have called out, starting with $250K and then having 20 more years is an advantage that not everyone has. It’s also unclear if you are using VOO/SCHD returns since their inception or using other proxies. They both started in 2010/2011 timeframe after one of the largest periods of market stress. Per Portfolio Visualizer, their returns since Nov 2011 are 14.49% for VOO and 13.13% for SCHD. And max drawdowns of 23.91% and 21.54%. Those are great numbers. But when I substitute VFINX for VOO so I can go back farther, the numbers are quite different. Going back to Jan 1998 (about when I started working and saving), the return is 8.69% and the max drawdown is 50.97%. The return is about what people say to expect out of the market long term. Your initial capital is 10x what you started with. That’s great. But that drawdown really hurts. Especially since that timeframe includes Dotcom crash and Subprime crisis. My shift away from buy and hold (aka set it and forget it) came over the course of several years, starting back in 2018 when I realized I was behind where I wanted to be. I started trying to optimize my portfolio as best I could with my 401K options. While it was fairly easy to optimize my portfolio and balance risk and returns, that balance came at a cost. With a B&H portfolio, I kind of had to settle on getting good returns with some pretty large drawdowns, or I could reduce risk and lower returns and drawdowns. Given the time horizon of another 10-15 years, I still tended to stay all S&P 500 based index funds. However, I then started to run across some other mutual fund-based strategies that weren’t pure B&H. Backtesting those actually improved returns and lowered drawdowns. I kind of settled there for the past few years with decent results with some core flaws that blindsided lots of people with bonds in 2022. So the more I dug into things and worked on my own models, the more I decided that the strategies I was using with mutual funds could in theory work with individual stocks. So I started dabbling with that. Granted there is tons of overfitting and bias and luck in what I have played with the past couple of years, but it has encouraged me to dig a little deeper to see if I can come up with a more principled approach to how I’m getting to my stocks I want to use. At the end of the day, there is definitely more risk involved with using stocks in a portion of my investment strategy, but I finally feel like I am ahead of where most age charts tell me I should be. If I had been able to diligently max out all retirement investment opportunities since I started work in 1995, I probably would have never gone down this path because I would have a fair amount of money set aside. But we had three kids between 1998 and 2002 and there were plenty of years where I “had” to turn off my 401K contributions completely. Which put me in a bit of panic mode when I realized I was behind where I should be. That’s my story.
Thanks for that! I’m glad to see at https://totalrealreturns.com/s/VFINX,VBMFX,USDOLLAR,VEGN it seems to keep pace (barely outpace) vfinx since inception! Makes me feel a bit less crazy to want to consider some exclusions while investing. The point of the thread was to be able to select my exclusions, ideally, but I would also love to know about other etfs where there is prison and weapons exclusions.
You have a lot of fundamental misunderstandings about how the capital markets work. And your comments seem to be based on emotion rather than actual facts and evidence. >.. if the risk is the fund could go under and we'd lose everything we contributed? There is no such risk. If a fund becomes insolvent, the fund asset simply gets liquidated and the proceeds are distributed to shareholders. A fund is a separate entity structure which invest in various capital market assets. Those assets have value. So even if a fund fails - the fund NAV doesn't change. And investors will get the proceeds back net of liquidation expenses. >Wouldn't it make better sense to put our money into HYSA or CDs instead of a 401K/403B? Absolutely not!!! And no one who knows anything about personal finance would ever say that. It never ever makes sense to put money into a depository account such as a HYSA or CD instead of a tax advantaged account like a 401k or 403b. The tax drag on a HYSA and CD is GUARANTEED to always under-perform a similar asset in a 401k or 403b. > wasting money on stocks because last time I had one I put several hundred dollars a month in for several years, but my account statements never showed more than about $3k, Your singular example is meaningless. What was the stock? And why did you invest in it? > So what's the point? I could have made more just putting it in a savings account instead of letting Wall Street charge me fees for wasting it. Because that is absolutely untrue. Evidence shows that reasonable capital market investing will always outperform savings. Let's take your example of "a few years ago" and assuming 2020-06-01. If you put $1 into a bank account at the prevailing risk-free rate (ie a HYSA). That $1 on an inflation adjusted basis would be worth $0.90. But that same $1 would be worth $1.65. [https://totalrealreturns.com/s/VFINX,SGOV?start=2020-01-01](https://totalrealreturns.com/s/VFINX,SGOV?start=2020-01-01) - using SGOV as a proxy for the current risk free rate.
Vanguard. VTSMX for the entire market or VFINX for the S&P 500.
>love some insight that I’m probably overlooking. the trouble with 10 year returns is that the *last* 10 years are rarely like the *next* 10 years with investing. for example, look at the long-term, year-by-year performance of the S&P 500 from this Yahoo link. scroll down to "Annual Total Return (%) History" and click "show more". https://finance.yahoo.com/quote/VFINX/performance/ This shows data way back to the 1970s for a Vanguard S&P 500 fund. look at 1990 to 1999. **spectacular** 10 year performance, only one year with a small loss. but if you picked the S&P 500 on the basis of the 1990s performance, you would be very disappointed in the *next* 10 years. there were major losses in 2000, 2001 and 2002. you had a short recovery and broke even in 2007, but then the 2008 crash happened which was as bad as 2000-2002 combined. the S&P 500 went from a decade of above-average returns, to a decade of below average returns. **very** below average, in fact under 1% a year. this chart uses VIIIX, another S&P 500 fund. https://imgur.com/a/s-p-500-vs-total-market-index-yZjkS1r in that same period, 1999 to 2012, using Vanguard funds international stocks beat the S&P 500 by over 1.5%/year https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=lUzkwQs805abl8aMrkHLD from 1995 to 2015, the S&P 600 (small cap US stocks) returned over 2x the S&P 500. the S&P 400, mid caps, performed even better. https://contrarianoutlook.com/wp-content/uploads/2016/09/SPY-Midcap-Smallcap-20yr-Chart.png the point is don't get too concentrated in things that have done well recently and ignoring things that are disappointing, because it will eventually flip-flop. we can't know exactly when it happens, but it will happen sometime.
Mutual fund or exchange traded fund -- both are fine. Which S&P 500 mutual fund will depend on your broker. Like fidelity is FXIAX I think, VFINX for Vanguard, and so on? With S&P 500 ETFs, they trade like stocks so you can use any of them. SPY is the oldest, but VOO has lower expense ratio. IVV is very common too, and I think the same expense ratio as VOO.
So why do the 3 large equity groups get to decide how much to rob my grandparents on power?!?! Duke (and most other energy companies) “Largest shareholders include Vanguard Group Inc, BlackRock Inc., State Street Corp, VTSMX - Vanguard Total Stock Market Index Fund Investor Shares, Wellington Management Group Llp, VFINX - Vanguard 500 Index Fund Investor Shares, Massachusetts Financial Services Co /ma/, Geode Capital Management, Llc, Capital Research Global Investors, and Morgan Stanley”
Duke energy “Largest shareholders include Vanguard Group Inc, BlackRock Inc., State Street Corp, VTSMX - Vanguard Total Stock Market Index Fund Investor Shares, Wellington Management Group Llp, VFINX - Vanguard 500 Index Fund Investor Shares, Massachusetts Financial Services Co /ma/, Geode Capital Management, Llc, Capital Research Global Investors, and Morgan Stanley .” Why do they get to pump prices on human needs?
VOO is an ETF, which generally means it's available everywhere for free. With *mutual funds*, most brokerages have trade fees, and then they exempt certain funds from those trade fees. Like if I wanted to buy VFINX (the mutual fund version of VOO), I'd have to pay something crazy like $75 to do so, because that's a Vanguard mutual fund and I've got an account at Schwab. But Schwab has their own zero trade fee mutual fund for the S&P 500 if I wanted to do that instead. I think it's SWPPX. Money funds are a subset of mutual funds, so those trade fees can exist if you pick some random fund, but they all (at least all the big ones) have several money funds available with zero trade fees. ETFs are exchange traded funds, so kind of like a mutual fund but dressed up differently. These trade like stocks, and since most brokerages these days allow you to trade stocks with no trade fees, I can happily trade VOO for free whether I use vanguard, fidelity, schwab, etc. So in theory, you could have something like a money fund in ETF form that everybody can access for free, but I don't know that one exists. Maybe there's some reason that the ETF format is not conducive to how money funds operate. There are very low risk ETFs out there, but I don't know any that do the "share price is always $1.00 per share" thing.
Warren Buffett, Charlie Munger and Nancy Pelosi. Maybe also Terry Smith, although he's only been around since the early 2010s so we don't yet know how his strategy will do in different market conditions. Some people also like Bill Ackman. Then there's also John Bogle aka Jack Bogle, founder of Vanguard and inspiration behind r/bogleheads, who mainly advocates for investing in index mutual funds which track the US market such as VFINX (which he created) because he thinks they will outperform vs actively-managed funds after fees in the long run. And there's also Peter Lynch, who ran a highly successful mutual fund back in the 90s. You can see how well Warren Buffett and Charlie Munger have done [here](https://totalrealreturns.com/s/VFINX,VBMFX,USDOLLAR,BRK-A) (they run BRK-A (ordinary people can invest in BRK-B which performs equally well and is run by the same people but hasn't been around as long which is why I used the graph for BRK-A instead)), and you can see how well Cathie Wood has done [here](https://totalrealreturns.com/s/VFINX,VBMFX,USDOLLAR,BRK-A,ARKK) (she runs ARKK).
Yeah. Even accounting for dividends, you'd still be negative if you'd bought back then. https://totalrealreturns.com/s/CSCO,VFINX If you ignore inflation, you will have almost broken even by now. Almost. Nvidia is a lot like Cisco. Their P/E is much lower than Cisco's was, but Nvidia is supplying the "infrastructure of the future" to unprofitable segments of businesses (Microsoft, Amazon and Meta are highly profitable but haven't gotten much of a return from their spending on Nvidia GPUs - the AI divisions are losing money, although they will be able to keep this up much longer than the companies from the 2000s could since big tech can just divert earnings from other parts of the business into AI; however, Microsoft and Amazon are accountable to shareholders and only Meta is fully controlled by its founder, so Nvidia's earnings could still decline).
it's not working on their UI also, lol: [https://finance.yahoo.com/quote/VFINX/](https://finance.yahoo.com/quote/VFINX/)
I tried it too, also 2019. I hadn't tried VFINX before today though. I was just trying to give you S&P 500 with dividends reinvested for historical whatnot.
I appreciate that, but that’s not the issue. VFINX’s inception was in the early 80’s, and *last night* I was able to download the daily data over its entire run. Today.. 2019 only. Plus, I’m not actually looking for VFINX data; basically every long-lived mutual fund I’ve looked at has the same issue today. Sudden catastrophic loss of historical data. Am I the only one?
To be fair, you would also need to account for dividends, which should up that CAGR slightly. I have the alternate story.. one of my regularly scheduled monthly buys of VFINX (the old investor class of VFIAX) happened to hit on March 9, 2009, the very bottom of the GFC, so I got some shares at $62.65/share (today VFINX is at $519.85). I'll likely NEVER have a better performing index fund buy than that particular lot of shares... the lowest price since 1996.
My suggestions would be the following: 1. Pay down any credit card debt you have. No investments will even come close to the APR you’re being charged by your credit card. Being debt free is the best investment. 2. Open a Roth IRA. Since your money is already taxed, you can put upto $7k in a Roth IRA and it can grow tax free. You won’t be able to touch it till you retire(can withdraw what you put in but not the growth without penalty) 3. Open a Vanguard/fidelity/Schwab account and just invest in 3 index funds - S&P 500(VFINX) or total stock market(VTI), Bond fund (VBTLX) and International stock fund(VTIAX). This will give you broad diversification and capital growth. Reinvest any dividends earned back into the fund. If you’re under 45… use the 80-20 rule. 80% stock and 20% bonds. 4. See if you can invest some money in a HYSA or a CD so it gains some interest. 5. Finally, keep some cash in your savings account (say $5k) and add to it every 2 months. This is your rainy day fund for any emergency.
https://totalrealreturns.com/s/F,VFINX. Ford's been underperforming for a while. I would recommend taking the money and putting it into QUAL.
Does anyone know why Shell went up so much around 1995? https://totalrealreturns.com/s/XOM,BP,SHEL,VFINX,BRK-A
Shocked,there is no s&p 500 choice...VFINX (23 bps from memory)... And you can surely replicate broad market or have that option. No guarantee SP I' Free "double your money" (net some tax) is huge
TDFs are good for those who just want to set it and forget it. But, you will more than likely underperform and leave money on the table. Unless that's not a problem for you. If you can make VTI and VXUS out of your 401k options, I would do that or maybe just VFINX and NAESX.
With dividends (but not counting the tax drag; this was all in taxable). In nominal terms, the total amount of money we'd put into VFINX from 1999-2010: $49,050. The nominal value as of November 2010: $51,315. The lost decade was truly a long grind.
> That assumes a lump sump investment at the top of the market. Not necessarily; things can be subpar for a long time, even with DCA. Personal experience I shared in another thread: been investing in VFINX/VFIAX from 1999-present in a taxable account, with regular monthly contributions since 2004. IRR (not counting taxes) for the whole 25-year stretch has been a pretty good: 10.2%. IRR from 1999-2010? 0.8%
We use Vanguard funds as our shorthand because they basically invented the low-cost index fund. VOO itself was established 2010 but its predecessor VFINX goes back to [1976](https://institutional.vanguard.com/investments/product-details/fund/0040).
Agree. VFINX is offered which essentially the same thing. With a much higher expense ratio. If you plot their history, they are identical.
My lifetime CAGR has been about 8%. I started in late 1997 with VFINX and then moved to a Coffeehouse Portfolio (Bill Schulteis) with 10% bonds for most of my investing career. I basically maxed out my 403b the whole time. I also have a taxable account that I f\*cked around with and found out that I suck at stock picking, market timing and options. Fortunately, I got smart after the GFC and mostly did ETFs and a few large cap buy and hold stocks so that's doing okay too. Hit financial independence in 2021. Sill working because I want to. My portfolio since hitting FI has been VTI 30%, AVUV 30%, 20% VGLT and 20% GLDM because that has the best safe withdrawal rate based on my research.
I don't see anything in the [rules](https://www.reddit.com/r/investing/wiki/index/rules) that prevent posting about alternative investments strategies such as tactical asset allocation so I'm going to just throw out a response along those lines below. I do see the bit about telling users "Don't try to time the market. Invest for the long term." but they have very clearly indicated that they want risk. If it weren't for the risk piece, then I would align with everyone else and say HYSA or VFINX. A fun thing that I like to do every now and then is create models based on the dual momentum strategy (i.e. [Traditional](https://www.portfoliovisualizer.com/tactical-asset-allocation-model?s=y&sl=5EcKk0dKOap0Sx350OpLmE) or [Accelerating](https://www.portfoliovisualizer.com/tactical-asset-allocation-model?s=y&sl=4tutPXum7jP9yKO4e2fzFR)) but use stocks as opposed to mutual funds. To eliminate some bias, just grab the [top 20 mega cap stock tickers](https://finviz.com/screener.ashx?v=111&f=cap_mega,geo_usa&o=-marketcap) (dropping GOOGL and BRK-A, so technically 18 tickers) to use in the model. For the past 6 months, using a [1-month lookback period, trading weekly, and holding the top 2 assets returned 55%](https://www.portfoliovisualizer.com/tactical-asset-allocation-model?s=y&sl=6XjUerZGfrAelD6KS67Gi7) compared to 21% for S&P. Changing to just holding the [top 1 asset returned 65%](https://www.portfoliovisualizer.com/tactical-asset-allocation-model?s=y&sl=1e51yU28xESLnG3V614mZV). "Wow! That's awesome! I'm all in!" Just be careful. There is risk involved. Using the [next 20 tickers](https://finviz.com/screener.ashx?v=111&f=cap_mega,geo_usa&o=-marketcap&r=21), you end up with a [-4% return](https://www.portfoliovisualizer.com/tactical-asset-allocation-model?s=y&sl=3g0MGqhriQiBqzFJXVD8hc) holding just the top 1 asset. The Magnificent 7 gets a [90% return](https://www.portfoliovisualizer.com/tactical-asset-allocation-model?s=y&sl=1LSglUWzwe5BWgitNNWfI4) the past 6 months with just a -0.24% max drawdown. So what's the catch? Where's the risk? If you [extend the backtest to go back as far as the newest stock can go back](https://www.portfoliovisualizer.com/tactical-asset-allocation-model?s=y&sl=7MtUlx9hOgZ7UB5A65CDmq) (META to June 2012), the returns are still great (49.66%) but the max drawdown is -69.43%. In fact, take a look at the Drawdowns tab and you can see that in that 12 year period, there were 8 periods where the drawdown was greater than 10% (-69.43%, -40.31%, -29.06%, -26.71%, -19.63%, -16.85%, -14.17%, -11.77%). In fact, add up the numbers from the Underwater Period column and you'll see that it spent almost 9 years underwater! This is also completely ignoring the fact that most of those gains were driven by ridiculous returns of META, NVDA, and TSLA since 2012 which most likely won't be repeated anytime soon. Of course, it goes without saying that we have no clue what the market is going to do in the next 6-9 months so you could lose 50% just as quickly as you might gain 50%. Good luck!
Portfolio Visualizer has nice drawdown stats. Take a look at this portfolio for VFINX (S&P500) which goes back to Jan 1977: https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=6IgDlfpn0bIWcvb0SSr7M2 Then go to the Drawdowns tab. The Covid 19 stress period was the 5th largest drawdown and 2nd fastest recovery during that period. And while we are on the topic of drawdowns, take a look at the drawdowns for this portfolio backtest with VFINX, VUSTX (long term treasury), and VBMFX (bonds). The “safe” assets had their worse year in a long time. https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=5V2VpiQkXSks60d2jlEsFu
No one can predict the future but we can take a look at the past: * [$30K invested in 1985 would have yielded just over $2M in S&P500 (VFINX)](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=3SKaZaZ8zZIbgOrxmPEiAX) * [$30K invested in starting 1985 at $750 (not inflation adjusted) per year for 40 years in S&P500 (VFINX) would have yielded around $400K](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=2In1IyP08iPJULPEVK58if) I know which one I would go with.
Go to portfoliovisualizer.com and play with the Tools > Backtest Portfolio feature. Here is a link to a backtest of Growth, Moderate, and Conservative “Lazy Portfolios” tucked away by the Portfolio # settings dropdown. They are compared to VFINX which is the S&P500 benchmark fund they use. https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=7NYsZOUCiX7AkxWbbohuQE
$100 contribution per month for 47 years (~$56K total) starting in 1977 and holding VFINX would $3M now. https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=7Q8130OLCB8pyxfrlNG1Ur
International is always a disappointment. VIGAX is Vanguard's nasdaq, and VFINX is Vanguard's S&P 500. Split all of it between those two and let it ride.
They don't... FXIAX (Fidelity) is 0.015. I was just using VOO and VFINX as an example. They're functionally the same fund, except one is wrapped in ETF clothes and one is wrapped in mutual fund clothes. But I can trade the ETF-wrapped one for $0 and I'd be charged some fee for the Mutual fund-wrapped one. It's silly.
It was just an example, because VOO and VFINX are both Vanguard's S&P 500 funds. FXIAX has the same shit and is even cheaper than SWPPX, except, ya know, trade fees.
>30 years ago every mutual fund had a 1%+ expense ratio Not 30 years ago. Maybe 50 years ago. VFINX (the mutual fund version of VOO) was still a tiny fraction of a percent when I first bought it in 1997.
> Thats bc they want you u to buy their funds. Every brokerage does this. I know... But it's dumb. I can buy VOO for zero trade fees, but VFINX costs $74.95? It's just annoying. WRT load, no load funds have been pretty standard, or at least widely available, for a few decades by this point. There are still funds with load, but they're usually niche, forced by terrible 401k plans, or traps for suckers.
Traditionally 86% of money fund managers cannot beat the averages before their exorbitant fees. If someone bought the VFINX (Low fee Vanguard Index Fund) they would probably be on the top 5% of all money managers. Long story but I learned that when the fund manager of our company fund could not produce a performance chart. I closed my account and managed my own money. I am now retired and do not regret my decision.
Fair enough, as long as you’re not taking a distribution. When people hear “brokerage” they will think of an Individual Taxable account as opposed to another IRA. VFINX is Vanguards S&P 500 fund.
Russell 3000 is your best bet. Here is a comparison of IWB(Russell 3000) and VFINX(S&P 500). Basically identical: https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=68R9fMpdxn4ejKsB1MAd2r
[This is a simulated TQQQ with $1000 monthly contributions going back to 1988 with S&P500 comparison.](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1988&firstMonth=1&endYear=2021&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=1000&annualOperation=1&annualAdjustment=1000&inflationAdjusted=true&annualPercentage=0.0&frequency=2&rebalanceType=0&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=1&leverageRatio=200.0&debtAmount=0&debtInterest=3.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&benchmark=VFINX&portfolioNames=true&portfolioName1=TQQQ+%28Simulated%29&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=FSPTX&allocation1_1=100) There are periods of enormous growth, but for 90% of the simulated period, TQQQ *significantly* underperformed S&P500. Given the enormous volatility one should expect the opposite. TQQQ only outperforms during long bull markets, but there's no way to tell in advance when those will arise. Further, TQQQ nears total loss during big downturns. Since no one has a crystal ball, TQQQ is at best a fun gamble. Just don't risk your whole portfolio on it.
You don't get a choice in 401k accounts. Or rather, you have a fixed slate of choices to choose from. None of them will be VOO. If you're lucky, you might get VFINX or VTSAX, and they'll only heap on a small amount of additional fees.
make that SWXXP, Schwab S&P 500 Index Fund or Vanguard 500 Index Fund;Investor,VFINX ​ both follow SP 500 index.. which is up https://www.marketwatch.com/investing/fund/vfinx#:\~:text=VFINX%20%7C%20Vanguard%20500%20Index%20Fund%3BInvestor%20Overview%20%7C%20MarketWatch
https://www.portfoliovisualizer.com/backtest-portfolio None of those share classes are 30 years old, but you can use VFINX for VOO and VTSMX for VTI, which are share classes of the same funds. QQQ is harder. You can try \^XNDX, the Nasdaq 100 total return index. Google shows it back to 2006 which is later than QQQ inception, but maybe there's a way to get it further back. Similarly for the Dow Jones U.S. Dividend 100 index but I have more doubt that will work out.
Not sure where you saw that it started in 2019. VOO's inception date is 09/07/2010, and it is a share class of the same fund as VFINX, the oldest index fund, incepted 08/31/1976. Broad stock portfolios generally go up over time on average. It is common for them to be at all time highs. You never know the best time to invest in stocks; it's not unlikely that VOO will be at a lower price at some point. But if you hold out for a lower price, eventually you'll be left behind.
Lets look at another then... Jack Bogle when he introduced the first ever RETAIL index fund which is now known as VFINX in ?1977 or so was so intelligent he wrote down EVERY single equity mutual fund at the time (small big and everything in between). There were around 320- 340 funds at the time. So satisfies you desires of all types. How did that work out? Somewhere around 25 years later (just 1/2 of an investor lifetime) only 11-12 beat his index fund. If you add 2% extra cost (conservative for extra friction due to taxes and transaction costs) it would drop to 5-6/340. That drops to around 2% success rate beating the alternative (investing in the index). This graph is in Rick Ferri's "power of passive investing" if interested. Yes. You do highlight ANOTHER reason not to invest in active mutual funds though. All those above mutual funds did those outperformance when they were small and not well known. Once they got "popular" the influx of money made it hard to replicate and they started to underperform. That is why it is always important to look at active funds and look at the DOLLAR weighted returned and not their TIME weighted returns.
I fat fingered the 20, should have been 30 which is what the CAGR and Balance reflect. At 20 years they flipped. At 10 years they flipped back again and VFINX took and kept the slight lead. Who know what will happen next but your view that it is good to have the extra diversification is still valid.
I agree with your last statement. I modified the backtest to use the mutual fund versions so I could go back as far as possible. VOO - VFINX and VTI - VTSMX for time period Jan 1993 - Dec 2023. VFINX - CAGR 10.03% - Balance $193,541 VTSMX - CAGR 9.94% - Balance $188,943 It sort of supports your view. At a cost of $4,500 you are able to get the diversification of the total market vs the S&P500. A minimal cost over the 20 year time span.
You're right on the strategy; "if it ain't broke don't fix it". But I just am curious as to the "why" of equal weighting in this strategy. I've read some of the documentation and it doesn't specify. And: 14.44% MOAT vs 13.59% VFINX (Since MOAT's Inception, May 2012 - Present) via Portfolio Visualizer, so 'grain of salt' I've also seen lots of advertisements, touting its slight outperformance. Idk seems an interesting Munger-esk fund.
You're right that SPX alone outperforms VTI + VXUS. My point about US large-caps still stands since SPX and VTI performance is almost identical, regardless if VTI has around 2500 more stocks than SPX. Just look at VFINX (SPX) vs VTSMX (oldest share class of VTI) on portfoliovisualizer.com Anyway, do you have anything of substance to add to OP's original question? We're both off topic lol
There are a number of SP500 mutual funds that go back even farther. Use one of those. VFINX goes back to 1984...a $10k initial deposit would be $620k today, an 11% annualized average
yes fxaix its also has half the expense ratio at .015% . Also for clarity I believe VFINX has been discontinued and there is only vfiax with vanguard. That was done when they reduced the admiral shares from 10k to 3k .
No just stick it in SPY etf or the equivalent in Vanguard 401K equivalent VFINX Don’t touch it and let the dividends reinvest into more.
i think you’re talking about VFINX and they had a dividend distribution on March 23 for 1.391 per share. [VFINX - yahoo finance](https://finance.yahoo.com/quote/VFINX/history?period1=1671668722&period2=1703204722&interval=capitalGain%7Cdiv%7Csplit&filter=div&frequency=1d&includeAdjustedClose=true)
Agreed, it's not totally implausible but something definitely doesn't sound right. Aside from ridiculous fees, a very heavy weighting toward foreign stocks, or some really unfortunate deposit timing\*, I'm stumped. * US Large Cap (S&P 500, e.g., [VFINX](https://finance.yahoo.com/quote/VFINX/performance?p=VFINX)) - 12.22% annualized the last 10 years * US Small Cap (Russell 2000, [IWM](https://finance.yahoo.com/quote/IWM/performance?p=IWM)) - 7.51% * International Equity (MCSI EAFE, [SWISX](https://finance.yahoo.com/quote/SWISX/performance?p=SWISX)) - 4.67% * US Bonds (Bloomberg US Agg Bond, [BND](https://finance.yahoo.com/quote/BND/performance?p=BND)) - 1.72% * REITs (S&P REIT Index, [FRI](https://finance.yahoo.com/quote/FRI/performance?p=FRI)) - 7.23% \* For example small caps have been meh the last 3 years, so if the deposits have been accelerating and OP was heavily weighted toward the Russell, that's a maybe? And I'm sure small-caps will have their day soon.
You can do it in excel or python + pandas or whatever your favorite language is. You can get daily price data from yahoo finance. Use the adjusted close column to include distributions. If you want to backtest further back than inception of those funds you'll need to reconstruct the fund returns. You can do that with daily data for VFINX and 30 year bond yields DGS30 at fred plus financing rates. UPRO would be financed at LIBOR + 30 bps, that is, the daily return of UPRO is 3x the daily return of VFINX minus 2x the daily interest via LIBOR+30bps. LIBOR doesn't exist any more so for recent years you can replicate it with tbills and a wider spread. To replicate bond returns from yields, you'll use the formula (3) https://www.mdpi.com/2306-5729/4/3/91. Treasuries can be financed at a lower rate so you can use 3month tbills plus 20bps or something instead of LIBOR. From there you will need to calculate your moving averages and build a portfolio for each day and compound together the portfolio returns. And annualize it.
> for the past 15 years not a single American fund has beaten the sp500. not accurate. simply wrong. AGTHX beat the S&P 500 from 1985 to 2023, almost 40 years. https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=6ygdZoriPdGnTt1IMe9vGA AGTHX also beat the S&P 500 from 2000-2020: https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2000&firstMonth=1&endYear=2020&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=VFINX&allocation1_1=100&symbol2=AGTHX&allocation2_2=100 AIVSX beat the S&P 500 from 2000 to 2020: https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2000&firstMonth=1&endYear=2020&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=VFINX&allocation1_1=100&symbol2=AIVSX&allocation2_2=100 the S&P 500 is not the benchmark for every fund in the universe. e.g., the S&P 500 is not a benchmark for an international fund, global fund, or US fund for low-volatility (AMMFX) >not even realizing the underperformance of the past few decades. but they *haven't* underperformed the last few decades, and you clearly haven't even looked up the data.
Backtest it compared to putting money in as soon as it's available https://finance.yahoo.com/quote/VFINX/history
Been buying VFINX and similar, watching it burn, buying more on the way down. Think I should buy some Yen too.
For point 2, VFINX started in 1976
The first index fund was VFINX and it is not yet 50 years old. So no such chart exists. However, some indexes existed before that and others can be reconstructed as if they did exist. [Credit Suisse Global Investment Yearbook 2016] (https://www.credit-suisse.com/about-us-news/en/articles/media-releases/credit-suisse-global-investment-returns-yearbook-2016-201602.html) has some charts of cash, bond, and equity returns in countries around the world. [PhilosphicalEconomics post Beer Before Steel](https://www.philosophicaleconomics.com/2015/09/industry/) has charts of equity returns by industry returns in the US. See also https://portfoliocharts.com/ and https://www.portfoliovisualizer.com/
You'd have $100k less if you used VFINX instead. Contrafund is one of the best performing mutual funds of all time
I started in the late 90s. Lived through two historic market crashes. Owned a tech focused mutual fund that lost almost 90% and get closed down. Played with individual stocks but can't say I beat the market. Fortunately the broader index funds (mostly VFINX, now VTI) made it through the period and are now multiples of where they were 20 years ago. I'm glad I stayed the course and kept adding. After the COVID recovery, I balanced my portfolio with alternatives (bonds, gold) and have been financially independent for several years. TL;DR early crashes are good for your financial health. Late ones, not so much.
You are of course entitled to your opinion, and I acknowledge the post-GFC decade saw SCV lose to SPY. I checked the backtest, btw, going from January 2008 to today ([link](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2008&firstMonth=1&endYear=2023&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&benchmark=VFINX&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=DFSVX&allocation1_1=100&symbol2=DISVX&allocation2_2=100)), and SCV did 8.28% compared to 9.47% for SPY. So it lost, but it wasn't a lost decade. If I change it to 2009 till today, then the figures are same (1% difference). International looked a lot rougher... Anyway, I was actually discussing this with someone else, but AQR put out a really nice article about 'value stocks' and some common myths/facts about it. If you get some time this weekend, [do check it out](https://www.aqr.com/Insights/Research/Journal-Article/Fact-Fiction-and-Factor-Investing). It might answer your more qualitative questions about why SCV, without just spitting out numbers. My short counter is that large caps have *always* had natural barriers to entry and resistance to downturns. In past decades, in countries across the world. The academics who study SCV show the premium is robust to all of these. E.g., Larry Swedroe showed the value premium / small cap value premium existing in other countries after 2008. The premium has persisted from the time of Roaring 20s, world wars, Cuban missile crises, etc. Second, everything you're saying about large caps having better moats / financials, that belief (which is true) is part of the reason there is a premium at all. If nobody was scared of small cap value volatility, much of the premium would likely disappear. So the bull case for value stocks is in part investors gravitating away from them. It's the same thing about ESG: it often has perverse impacts, by creating a discount on fossil fuel or tobacco stocks. This discount then creates opportunities to buy in 'cheap' and ultimately profit from the large cash flows relative to the price paid. I'll stop there, and I'm glad I had this exchange so I could refresh myself on some of this data. If I can agree with you on one thing, being long on stock markets is always a good thing, we simply disagree on what flavor of long is best for the next 20 years.
To respond to your other comments, okay this is more fair. Declaring small cap value premiums dead is un-empirical and ahistorical). But it is absolutely fair to question whether everyone should hold it. [Let's return to the Dimensional vs. SPY comparison](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2023&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&benchmark=VFINX&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=DFSVX&allocation1_1=100&symbol2=DISVX&allocation2_2=100) since January 1995. You see the standard deviation of 20.82% for SCV vs. 15.28% for SPY. Is that so bad? Well guess which one had the bigger max drawdown? It was SPY: -37.02%, versus Dimensional's -36.79%. So why is the standard deviation so high? Well Dimensional's best year saw 59.40% while SPY 37.45%. Volatility skewed to the upside, that sounds pretty cool doesn't it? You have a valid point though, but nobody is declaring that investors should go 100% SCV. That's irresponsible. All I would say is an investor would do well by taking say 20% SCV to complement a globally diversified market-weighted index funds. You'd barely increase the total standard deviation and get a hedge against lost decades for the S&P 500, for instance.
Yes, as I always repeat, if you literally look at the past decade, you'd conclude you'd only invest in big US tech companies. Here's Larry Swedroe [in an article you should read](https://www.morningstar.com/portfolios/its-too-soon-say-value-premium-is-dead): > We heard the same argument about the death of the value premium in 2000. From 1994 to 1999, the S&P 500 returned 23.6%, annually outperforming the Fama-French small-value research portfolio by 7.2 percentage points. However, the declaration of the death of the value premium was premature. From 2000 to 2007, while the S&P 500 returned 1.7%, the Fama-French small-value research portfolio returned 16.2%, outperforming by 14.5 percentage points annually. Such performance should be a cautionary tale for those declaring the death of value. > If the underperformance of the value premium in U.S. stocks since 2008 was a sign that value was dead, we should see similar underperformance outside the U.S. From 2008 through July 2023, the MSCI EAFE Index returned 3.2%, but the Dimensional International Small Cap Value Index returned 5.2%, outperforming by 2.0 percentage points annually. In emerging markets, while the MSCI Emerging Markets Index returned 1.7%, the Dimensional Emerging Markets Targeted Value Index returned 4.1%, outperforming by 2.4 percentage points. Thus, outside the U.S., investors who diversified their portfolios to include small-value stocks benefited. (I won't include the rest but there are other juicy stats in the article) Second, if you do insist on playing a short-term game, going back to January 2020 (as far back as I can due to short-term inception date), AVUV has 13.34% CAGR vs S&P 500's 11.17% CAGR. [Source from Portfolio Backtest](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2023&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&benchmark=VFINX&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=AVUV&allocation1_1=100&symbol2=AVDV&allocation2_2=100). That's too short, you say. Okay fine, let's take Dimensionals small cap value mutual fund (which does go back longer and uses a similar methodology to Avantis). From Jan 1995 - Aug 2023, 11.27% CAGR for Dimensional's DFSVX vs. 10.24% for the S&P 500. [Link to Portfolio Backtest](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2023&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&benchmark=VFINX&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=DFSVX&allocation1_1=100&symbol2=DISVX&allocation2_2=100). You can keep on repeating that small cap value has sucked in 2023 or since the GFC in the most unprecedented period of ZIRP. Or you can look beyond to longer historical periods or to well-implemented small cap value ETFs that have done quite well in the last 5 years.
You're mistaken. See link below. Also, to extend backtesting, always use the oldest share class, like VFINX (VOO is the ETF share class of VFINX, now offered as VFIAX). [VOO vs SPY 2018-2023 with dividends reinvested](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2018&firstMonth=1&endYear=2023&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=VOO&allocation1_1=100&symbol2=SPY&allocation2_2=100) Zooming out, there is an immaterial/negligible difference in performance between any S&P 500 fund in the fund universe. Additionally, any S&P 500 fund and any total US stock market index fund is also 99% correlated so returns have been almost identical. Just look at VFINX (oldest share class of VOO) vs VTSMX (oldest share class of VTI). Options chain is deep for SPY, making it extremely liquid. That's the advantage SPY has over VOO as a trading tool. As a buy/hold instrument, it doesn't matter which one you choose.
You don't need to do either. Just put everything in a total stock market index fund and be done with it. You don't need to know anything about investing. Here is the gist... Dude name Bessbinder found that 4% of ALL stocks EVER are responsible for all the returns of the stock market. So guess how hard that would be to guess which one's those would be to find in that BIG haystack of stocks? Yeah REALLY HARD. So the most logical thing to do?? Just buy the entire haystack to make sure you get all the winners along with all those losers as well. Well a dude name Jack Bogle in late 1970's thought of it already and designed the first retail available index fund which has now named Vanguard total stock market index fund (VFINX). Luckily, due to how it works it is so efficient it is cheap and loses very little money to slippage (tax inefficiency) each year (good for investors). EVEN better as there is NOTHING for you to don each month other then throw money into it so no need for a FA as you are not trying to time the market OR pick out the winners so saves a TON of your returns from hiring a FA. There is all your need to know about investing in one paragraph. Of course, there is a lot more about asset allocation, i.e. how much should divide in stocks vs. bonds, should I put some of those eggs in international stocks vs. 100% U.S, etc... BUT that said if you just invested EACH month into 100% U.S. total stock market you are likely to do better then 80% of ALL professional money managers in America. No I am not kidding. Good luck. BTW, as you go along if you need free advice and more knowledgeable advice then the FA (yes I am being serious) try bogleheadsDOTcom. I started there 15 years ago when started by investing journey and it made investing SUPER easy!!
>Vti and s&p 500 (VOO for vanguard) have returned almost identically over the last 20 years if I'm not mistaken. [They've been almost identical for a lot longer than 20 years](https://www.portfoliovisualizer.com/backtest-asset-class-allocation?s=y&mode=1&timePeriod=4&startYear=1972&firstMonth=1&endYear=2023&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&benchmark=VFINX&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&asset1=TotalStockMarket&allocation1_1=100)
The OP had asked why BRK. Not sure why he deleted. I specifically am focusing on BRK.B because that's the one that I started putting money into in the mid-late 990s and DCA along with S&P 500 index instrument and a few others. But since I started putting money in BRK.B it's treated me pretty well. The numbers might not play out in the last 5 years or so, but when I got into it, it's done very well. [BRK.B](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1996&firstMonth=1&endYear=2023&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&benchmark=VFINX&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=KO&allocation1_1=100&symbol2=BRK.B&allocation2_2=100&symbol3=WM&allocation3_3=100)performance vs. some others.
Where do you get 160%? I'm seeing [115%](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=2&startYear=2019&firstMonth=9&endYear=2023&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=0&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&benchmark=VFINX&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=ITI&allocation1_1=10&symbol2=ENPH&allocation2_1=10&symbol3=LTHM&allocation3_1=10&symbol4=CASHX&allocation4_1=10&symbol5=UBER&allocation5_1=10&symbol6=AUPH&allocation6_1=10&symbol7=JD&allocation7_1=10&symbol8=BYDDY&allocation8_1=10&symbol9=CGC&allocation9_1=10&symbol10=PCG&allocation10_1=10) with no rebalancing, and that's total return not price. (I did sub in cash for EROS, since that ticker no longer exists and it was basically flat.) I found it interesting that the /r/stocks portfolio actually had the same Sharpe ratio as the S&P 500. In other words, this list arguably didn't outperform, and the excess gains can be attributed to the high risk/beta/volatility.
It's true, I just checked it. [Link to backtest on Portfolio Visualizer](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2000&firstMonth=1&endYear=2023&lastMonth=12&calendarAligned=true&includeYTD=true&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&benchmark=VFINX&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=MCD&allocation1_1=100).
The automated cashflow is nice and there are quite a few that outperformed SPY / VOO, Or at least performed the same but with less volatility. There are great funds out there, ignorance goes both ways. This will get down-voted anyway, so i'am not going into detail, but just a quick example: [Link](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2023&lastMonth=12&calendarAligned=true&includeYTD=true&initialAmount=1000000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=true&showFactors=false&factorModel=3&benchmark=VFINX&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=BST&allocation1_1=100&symbol2=STK&allocation2_2=100&symbol3=ABR&allocation3_3=100)
Are you looking specifically for the "growth" factor or do you mean growing your portfolio in a general sense? Those are two different things. While the growth factor has performed well lately, that historically hasn't been the case all the time. QQQM, VUG, and similar funds would be good choices. I'd probably favor VUG since it includes a wider set of large cap growth companies (like financials) that QQQM wouldn't. If you want to increase the expected return, you should consider a combination of growth and value companies. I'd say even going with a large cap growth and small cap value split 50/50. So maybe VUG 50% and AVUV 50%. [Here's a backtest showing the 50/50 LCG/SCV versus QQQ and SP500](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2023&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&benchmark=VFINX&portfolioNames=true&portfolioName1=50%2F50+LCG%2FSCV&portfolioName2=QQQ&portfolioName3=Portfolio+3&symbol1=VISVX&allocation1_1=50&symbol2=VIGRX&allocation2_1=50&symbol3=QQQ&allocation3_2=100)
This also assumes tax-free dividends, fwiw. BRKB would have outperformed in taxable over this specific timeframe. Plus, 20 years is a somewhat cherrypicked comparison that sounds like SP 500 is better. Berkshire [beats SP500](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2004&firstMonth=1&endYear=2023&lastMonth=12&calendarAligned=true&includeYTD=true&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=BRK.B&allocation1_1=100&symbol2=VFINX&allocation2_2=100) over 19 and [crushes at 21 years](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2002&firstMonth=1&endYear=2023&lastMonth=12&calendarAligned=true&includeYTD=true&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=BRK.B&allocation1_1=100&symbol2=VFINX&allocation2_2=100).
Here [S&P 500 vs BRK.A](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=2&startYear=2003&firstMonth=1&endYear=2023&lastMonth=7&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&benchmark=VFINX&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=BRK.A&allocation1_1=100)
Yeah, and in the years you didn't list, they did not beat the S&P. Obviously there's going to be year-over-year variability. Unless you're timing the market, there's no way to realize those cherry-picked gains without also being exposed to the losses. [As someone else linked above.](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2003&firstMonth=1&endYear=2023&lastMonth=12&calendarAligned=true&includeYTD=true&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=BRK.B&allocation1_1=100&symbol2=VFINX&allocation2_2=100)
https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2003&firstMonth=1&endYear=2023&lastMonth=12&calendarAligned=true&includeYTD=true&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=BRK.B&allocation1_1=100&symbol2=VFINX&allocation2_2=100
>but I think they'll have better chance for growth over the next 2-3 years what's your basis for that conclusion? the Shiller p/e for the S&P 500 is presently 31. https://www.multpl.com/shiller-pe a number that indicates very high odds of below-average returns going foward. that can take the form of a major crash, or it might indicate a stagnant market with no growth over a 5-10-15 year period. the Shiller p/e is one of the most accurate forecasting tools we have, Robert Shiller of Yale won a Nobel price. is your MIL prepared for 3 years in a row where the S&P 500 goes deep in the red? this happened in 2000, 2001 and 2002. https://finance.yahoo.com/quote/VFINX/performance?p=VFINX look again at the Shiller p/e chart and the only other time before now it's been at 30 or higher was just before the 1929 crash and the 2000-2002 crashes.
Buffett has trailed the S&P the past 20 years [BRK vs S&P 500](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2003&firstMonth=1&endYear=2023&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&benchmark=VFINX&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=BRK.A&allocation1_1=100)
>The proof is the actual result. Your arguments are no different than the metric arguments given 10 years ago. Over a sufficiently long period, yes. The point is we don't know how that will match up with our personal goal(s), horizon, and retirement date. That's why we suggest buying the entire haystack, not one single country out of nearly 200 in the world. Your statement is the precise definition of outcome bias. >Diversification is diversification, whether personally managed, on a regional basis, or within the individual holdings themselves. Here we're talking about portfolio diversification. Obviously. >That tends to happen when one category has a 10Y CAGR in the double digits (US) and the other doesn’t. That's... not how correlations work. >I can really take anyone seriously when they select start and/or end years during moments of economic crisis. Your EM argument is shaky and I’d wager the Global claim suffer similar inaccuracies….not that I would put much weight in data Purely to illustrate that it's possible and that we can't know the future or, again, how those dates would match up with one's horizon. I often tell novices to imagine we knew nothing of these markets' histories relative to each other. How should we invest today? Probably just buy the globe and let the markets sort out the weights, and probably *not* buy 1 single country. Japan, Russia, and Germany offer sobering examples of why that's perhaps not the best idea. Again, if global is the agnostic default, the burden of proof is very much on the US-only position, and I've just seen no sound evidence for it. Most of the arguments, including much of yours, seem to rest entirely on familiarity bias, recency bias, narrative bias, and the aforementioned outcome bias. Not "shaky," just [a statement of fact](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2000&firstMonth=1&endYear=2020&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=VEIEX&allocation1_1=100&symbol2=VFINX&allocation2_2=100). It's binary yes or no. For posterity, [here's](https://www.bogleheads.org/wiki/Domestic/international) the 1970-2008 stat. Will the US-only investor be fine? Probably. But I rest much easier at night knowing I'm insulated against unknown unknowns, so for me it's more of a risk consideration and less of a performance one.
I will be downvoted for this but there is a real strategy! You do stocks and bonds such that sharpe ratio is maximized, then increase leverage to take on more risk. A canned approach that you can follow easily is WisdomTree 90/60 (ticker NTSX). They have 60/40 plus leverage to take on more risk and increase that to 90/60. [It did not beat VFINX since inception - Portfolio Visualizer.](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=2&startYear=1985&firstMonth=1&endYear=2023&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&benchmark=VFINX&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=NTSX&allocation1_1=100&symbol2=SPY&allocation2_2=60&symbol3=BND&allocation3_2=40) It did beat 60/40 since inception. That is the idea. It did not work out for this particular time period, there have been a lot of finance-news articles about how 60/40 is performing poorly in recent years. With too much leverage you will hit zero and wipe out. You can't know what's too much ahead of time, but you can backtest. The 1.5x leverage NTSX uses is probably okay long-term.
Historically the answer is dividend growers outperform. https://documents.nuveen.com/Documents/Nuveen/Viewer.aspx?uniqueId=5d8a964c-cbcf-4a07-b181-eb6ace0eb3b4 If we choose T. Rowe prices dividend growth mutual fund PRDGX (30years of data) and compare it to the s&p500 VFINX (vanguard s&p500). At an initial investment of $10,000, PRDGX outperforms over its history and with a lower volatility over the time period. https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2023&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=VFINX&allocation1_1=100&symbol2=PRDGX&allocation2_2=100
[BST with an 8% dividend yield](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2023&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=BST&allocation1_1=100&symbol2=VOO&allocation2_2=100) [GOF with a 13% dividend yield going back even further](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2023&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=GOF&allocation1_1=100&symbol2=VFINX&allocation2_2=100)