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Trying to find an etf comprised of only top 10 market caps
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If your looking for leverage on an index don’t but 1 - TQQQ option by 3 options of the under index or (index equivalent) etf. If you can’t afford 3 - QQQ options try 3 - XLG options for example. They have long term positive drift and not the negative baggage of Leveraged ETF’s.
And if you had been doing the same strategy for 20 years, you would have been underperforming the S&P 500. Compare S&P 500 to XLG (top 50 stocks) over the past 20 years. S&P 500 was about 900% gains while top 50 was about 600% gains. I chose top 50 instead of top 10 because I don't know of any top 10 ETF that has been around longer than this current bull run, so no back data.
That’s not that bad. Spx is down 2.6%. XLG / top 50 is down 2.95. I think the economy has been slowing down for quite some time and the stock market is finally slowing down. https://preview.redd.it/8gd8dkkoving1.jpeg?width=968&format=pjpg&auto=webp&s=b09695832d6395dba2d9e5d64eb09c02d6da8a87
S&P 1, hilarious. I don’t doubt it outperformed. I usually own XLG (top 50) but don’t at the moment.
Consider XLG or the S&P Focus 50, a performance edge over S&P over the past 5 years. A bit about below: https://www.aksala.com/blog/sps-allstar-team
Got it, I didn't read the whole article, after I saw the picture I realized, it's factually false because you can't calculate the top 10 exactly because it changes everyday. While we don't have a true top 10 ETF we have the XLG ( S&P 50) the top 50 companies and it outperformed the SPX by a longshot in both the 5, 10 and 15 and 20 year timeframe. https://preview.redd.it/tariqyp4rshg1.jpeg?width=958&format=pjpg&auto=webp&s=09bdd3c6119dd8e4597502533afee39f587ae5de This picture is idiotic, because a company will join the top 10 one day and then get out the next day. Also why are we calculating from 1927 ? That was a totally different market. I'd say the last 10 years reflect the reality of todays market the most with 0DTE options and the rest.
But with it being cap weighted, you have virtually zero exposure to a huge amount of companies that add up to like half of what you put into the etf. There are top 20, 50 etfs (TOPT, XLG). If a company moves up from #500 to #50 youll eventually get it. But its like you have nickels in 400 companies instead of a big daddy bet in 50 companies. Idk I don't think the bottom 400ish companies are doing much for you other than robbing you of having actual reasonable exposure to the real winners. They aren't the top 50 by going down more than they go up. They got there by...going up
Could you look into other ETFs? Throughout this year I held most of my portfolio in XLG, which is just the top 50 stocks in the S&P - therefore I ended up with higher gains than the general market based on the tech run up. I recently sold that position, and I don't necessarily recommend investing in those mega caps in the current environment, but see if you could find another creative ETF out there that's still fairly safe retirement wise.
XLG which is the S&P top 50 .. while not averse to downturn given the run up but has the best of the best companies. It will be the last one to go down dramatically (vis-a-vis speculative names) and will be first one to come out of the downturn if it happens. Single stocks are just inherently risky but that is where most of the dramatic gains are made.
On interactive brokers, it's still under 5. I don't know what future numbers they use, but either Way, it's not super meaningful for a company just about to turn profitable. I don't have anything super high conviction right now. The only options I have are Leap on SE with barely any leverage and a tiny number of puts on XLG just in case the market crashes.
When my husband died, I was suddenly hit with way more money than I could have ever imagined. He handled all of the finances, so I knew literally nothing. I put it all in a hysa at 4% interest and sat on that, and then studied personal finance like I was getting a degree in it. I talked to everyone, even people who I think make bad personal finance decisions. (This was much more enlightening than it seems, as it helped me sort out bad advice from good.) I approached it slowly and methodically. I kept our 401ks and IRAs as they were, since I trusted my husband's judgment on that and that is my primary safety net. I got a Step account (normally meant for children and young adults). I learned about ETFs and stocks, and each time I got interested in one, I bought exactly $100. This gave me skin in the game, in a way that reading could never do. I bought VOO, VTI, Fidelity Bitcoin, Roblox, XLG, MAGS, etc. A decent variety. This process was sooooo beneficial, as it allowed me to 'feel' the ups and downs, and work through that feeling of 'omg did i just throw money away?!' I sat on each of my $100 purchases for months before taking bigger action. Only once I was comfortable, I would withdraw from my HYSA and invest $1k, $10k, $50k, etc. This process helped me balance FOMO with confidence, as yes of course, I could've earned more in that time. I wanted to know that *I* was making these decisions, and not just chasing Warren Buffet or the millionaire next door. Nowadays, my parking lot is VOO and not an HYSA, but I don't regret my HYSA days at all.
Yes, and yes. Not a bond person now and never have been as bonds have their own issues. I am retired Roughly an and portfolio is all in equities ( stocks and etf’s ). Most of the individual equities pay a 4% or better dividend . I own the usual ETFs, ie VOO, VTG , VUG, and XLG so I am getting full market exposure and a very healthy dose of AI, robotics, health and technology. Also good chunks of GNR and XME as materials are not going to go away.
Put 25%-50% in VXUS, the rest VOO or XLG
XLG calls are free money
Easiest is buy an “ESG” fund. Calvert funds have the longest track record since the 1980s for [iirc] religious objectors but probably “active” management with their “non-vice” approach. Still Calvert are the long term players, but there’s various ESG-screen index ETFs at mostly iShares (too many to list here, but XVV, USXF, and DMXF are relatively low cost) .. but Vanguard released 2 recently. Thing with ESG is the companies have responded to them, so you get big oil companies but not a small solar company that can’t afford the HR. Another idea is direct indexing (Fidelity) where you hold the individual stocks .. screening the holdings of a top 50 (XLG) ETF or even top 100 global (ishares IOO) ETF against the top ESG large cap holdings (use VXX, USXF, DMXF). The late Jack Bogle theorized buying and holding such a DIY index could slightly beat the S&P 500 over time. Another idea is go with momentum index ETFs (Invesco’s SPMO is has the best returns) and rebalance annually. You can say you’re “selling” any problematic stocks; probably pair with something like low cost Vanguard or iShares core bonds for stability (iShares even has an ESG bond index .. basically big bank and Treasury bonds). May even be some green lending. Could combine the last 2 approaches too.
I think something worth pointing out here is that this is inside of Schwab’s UGMA account. And particularly with this kind of account you cannot buy fractional shares of just any stock. You can buy fractional shares of anything in the S&P 500 only. So if they want to buy a foreign company or something outside of the S&P 500 or an index fund, they need to have enough money to buy a single share of it. This is why a lot of the companies they’re picking are going to be fairly well-known brands that are profitable or have been profitable businesses because you don’t get into the S&P 500 by being a meme stock. They do have a few that are outside of the S&P 500. Such as peloton which has been her biggest loser. But the share price was low enough that she was able to buy it with her $50 monthly contribution. She also has some shares of XLG which tracks the top 50 performers in the S&P 500. The only reason she owns this index fund is because it trades at about $50 a share. They have been plenty of months when she has bought this instead of stocks. And she has a pretty good understanding that this fund represents for all intents and purposes little pieces of the biggest 50 companies in the United States. I’m getting a lot of heat here saying that I’m picking these for my kids. That is absolutely not the case. If they ask for advice on a category, I will give it to them and mention companies that are in that category. If they ask me what companies make candy I’ll tell them they can buy Hershey’s or maybe Berkshire Hathaway since they own part of sees candy. I love the irony with all of you that we’re all quick to critique that some five-year-old might have purchased a company without doing due diligence or knowing what they make or based on one product that they might make or an impulse because they like the brand. And you all act like you do due diligence and read quarterly earnings reports whenever you purchase every single stock in your portfolio. Let’s all not be hypocrites. Very few people are doing this sort of research before buying a stock.
I literally let them pick. Initially, they’re picking just things they know. They literally buy Amazon, Apple, Starbucks, Domino’s Pizza, that sort of thing. Sometimes they ask about something they like like video games and they say what stocks are good for video games and I might give them some ideas on video game companies. After a couple of years, my oldest will run out of things to buy that she knows so then she just started buying more of certain things. She’s bought Google multiple times because she likes YouTube so much. She’s also bought things that are totally random just because a singular product like Marriott was because she really liked the hotel. We stayed at in Hawaii and it happened to be a Marriott. She bought caterpillar because her sister was obsessed with Blippi and the excavator song. She bought kellanova because she went through a pop tart phase. She’s also had some losers like Nike and peloton the ladder of which she bought because mom has a peloton. And more recently, she bought an index fund XLG to be specific because Schwab doesn’t allow fractional shares of index funds and I simply explained to her that when you buy an index fund, you’re buying parts of lots of companies and this one is the 50 biggest companies. I honestly don’t help her much at all.
$50/mo just gift. We have conversations each month on what they want to buy. Usually it’s just brands they know. Literally they ask to buy McDonalds, dominos, etc… and I let them. I have introduced them to indexes lately. They’ve been buying XLG mostly just because Schwab doesn’t allow fractional shares of ETFs and they can get a whole share of XLG around $50. They haven’t sold any yet but her only major losers are Nike and Peloton. The latter we should probably sell.
A single stock and an index fund is not apples to apples. Come on now. I'm not gonna argue about any of the other stuff you have to say. But, please come up with a better response than why not just buy Nvidia. Compare qqq to another index fund. Not a single stock. If you were to say why not buy QTOP (top 30 qqq) or topt (top 20 s &p) then it would've made sense. Or even XLG (top 50 s&p) would be comparable. A single company can go bankrupt, and you will lose all your money. An index fund will get rid of the bankrupt company and replace it with another company. And 10x Nvidia doesn't even exist. Let's be realistic here.
VOO and XLG. Ignore the rest
For starters, keep it simple. VOO is your friend. XLG if you want to spice things up a bit. Remember that investing is a long term game. Keep pecking away at it and don’t make rash choices. If possible, invest through a Roth IRA. That’ll shelter your funds from taxes. Have fun and good luck!
> top 50 S&P There’s actually an ETF for this (XLG by Global X), as well as S&P 100 (OEF by iShares). OEF has the longest track record. Seems to resist volatility a lot better, but may not knock it out of the park if mega-caps get overvalued. iShares also offers the top 20 of the S&P (TOPT) and the top 30/bottom 70 of the QQQ (QTOP and iirc QNEC, respectively). Not the lowest
>The Invesco S&P 500® Top 50 ETF (XLG) is an exchange-traded fund that seeks to replicate the performance of the S&P 500 This?
No, if your logic is to buy SPY, your real logic should be too buy XLG as its basically an ETF of top performing SPY stocks at a cheaper rate. I tried calls months out end of last year and this market hasn’t moved this year though like it’s been the past two years. I would run XLG stocks and not options, play the wave 🌊.
Sold out of my position on 1/22. I’m still exposed through XLG & VOO but yeah fuck Elon Musk
Thanks. I was thinking maybe throwing into dividends a little too but feel better to get growth in my stocks for now then reallocate to dividends in 10/15 years so that I can hopefully live off them (if things go according to plan). I like XLG but think I'd have too much correlation with my single names (mainly AAPL, MSFT, GOOGL, AMZN, etc).
SPY is fine. Its probably the most reliable possible place to put it. I also have some in SGOV in case the economy tanks, and some in XLG (a top weighted version of SPY using the top 50)
There is an idea that due to the way passive etfs are managed and distributed, the top companies will continue getting the most money so price discovery is off. $100 invested in SPY, means $7 to AAPL, 7 to NVDA, etc and Waste Management gets 16 cents. So combined with their aggressive share buybacks, FCF, etc you have a lot of tailwinds for the top stocks to grow. I keep some money in XLG, which invests in the top 50 stocks, as a slight tilt in my long term portfolio which has VTI, IWM, VXUS, etc.
Why yes, my only holding until I retire is XLG, how could you tell 
>Yet somehow XLG is outperforming BRK.B. XLG was established in May 2005, and has an all-time performance of 435% appreciation. BRK.B over that same time period has had more than 700% appreciation. Funny definition of outperformance you've got there.
Yet somehow XLG is outperforming BRK.B.
I’d honestly rather shuffle back more into QQQ https://totalrealreturns.com/s/XLG,SPY,QQQ Seems to capture the tech heavy outperformers but has just been straight up better than XLG
The higher risk, and the market uncertainty over the last year are the only reason I don't have a bigger stake in XLG. But as things stabilize, I plan to move back into it more. I'm normally a believer that Tech will keep going up for the foreseeable future, but it remains to be seen if the AI hype is a bubble or not. SP50 will get hit harder than SP500 if AI hype proves to be a bubble and it ends up popping. I'm curious if there is more to the story about the drawdowns, because I found the same stats you did, but when I look at the performance over the last year, every time the market dips, the SP50 line almost hits the SP500 line, but when the market rises, the SP50 rises almost twice as much.
https://totalrealreturns.com/s/XLG,SPY XLG since 2005 has outperformed SPY by like 20% In this timeframe its worst drawdown was 53.24%, SPY was 55.98% Seemingly less risk. Gotta remember that the top 50 will cycle, so if one starts doing worse it will be replaced
Not necessarily. If you take the top 10 stocks, and lets say #6 overtakes #5 that doesn't mean that #5 lost value, it could mean #6 just has grown faster. To be clear I am not doing this strategy I'm just explaining it. There is an EFT called XLG that is just the top 50 of the S&P 500. That's not the majority of my holdings, but I do own it and it has performed well.
Why are you saying it performs considerably worse? XLG has never performed "significantly" worse than SPY
First, you are absolutely correct to be re-allocating your money to equity positions. I suggest you consider something like 65% ETFs eg: 30%VOO, 15%VGT, 10%VUG, and 10%XLG. For your remaining positions I would recommend 35% in positions that provide both diversification and income from materials and mining positions eg: 10%BHP, 10%RIO , 7.5%GNR and 7.5%XME. For disclosure this is very much my own portfolio. You should also note that am retired, and believe most retirees are best served by similar portfolios, ie : Equity positions to provide growth and Materials/Mining positions to provide growth and to further boost up dividend income.
You might consider QQQM for tech diversification. Also I have found XLG to be intriguing, it's the top 50 of the S&P 500. Another people talk about is AVUV for small cap exposure but small cap is still stuck in a bear market.
There's an ETF that does that with the top 50. It's called $XLG. Roughly tracks the SP500 until early 2023, which is when $AAPL, $GOOGL, $MSFT et al. became the Magnificent 7, at which point it outperforms. Last 2 years: XLG +57,5%, SP500 +44.0%. Note, the SP500 ALSO contains all the members of $XLG (some, to an embarassingly large weight, as SP500 is market-cap weighted) so yeah, large cap growth seems to be the preferred play the last 24 months. Then, there's $FNGU, which is a triple-leveraged bet on the top 10 companies....
I used to be a Boglehead, but I'm impatient and have a high-risk tolerance. I'd invest in one broad market ETF anything from XLG (top 50 stocks of the S&P 500) to VT (Total World) for something slow, steady, and safe. I'd also go with one high-risk high-reward ETF. If you're more conservative, I'd go with QQQM (Nasdaq-100) or SMH (semiconductors) for something extra spicey. If you are willing to risk great drawdowns for the chance of massive profit, go with TQQQ (3x N-100) or even QQQU (2x leveraged Magnificent 7). Then something super stable that barely budges during bear markets like XLP or VDC (Consumer Staple ETFs).
FNGS, SMH, IXN, IBLC for tech space as it's down the most And index-based funds like XLG, QQQ or even SCHG/FBCG
I never got into XLG. I started out with CRS and they blew up. You could watch for the next dip in CRS, then sell the XLG to keep that money on the app then put it toward your stock of CRS, if that makes any sense. What I do is put bits of my paycheck every period to my stocks. I buy one share of CRS each paycheck, if I can afford it but I have total faith in it. I am in ut for the long run. You have the right idea spreading out your portfolio, but I would give it a shot if you can afford it.
Thank you for the suggestion. Do you think that I should swap XLG for crs? I haven't seen much growth in xlg unfortunately
Index funds hold a lot of crap. Basically, anything below the 1% holding is worthless. Look what every index fund holds in their top 10 holdings and look at the percentage that goes into them. Then look how quickly those percentages drop after that. However, I don’t think that they’re worthless. Maybe 10%-15% in a portfolio. Something like SCHG, QQQM, or XLG. Even DGRW, only because that fund has good protection in a bad market.
Check out QGRW & XLG Study the hell outta bitcoin
Watched it. Very good. Obviously his fundamental knowledge is correct but if his theory pans out, then we should expect to see the mega-caps pull away from everyone else, which I guess we are witnessing in real time. If he’s right, then XLG or QQQ are probably the better play long term, right?
My dad convinced me to buy some ETFs like XLG and XLK but holy shit they're so lame.... Everytime I look at them I want to cash them out and dump it in TQQQ
There is also XLG which is the top 50 companies in the U.S. based on total market cap.
There is an ETF that does this. XLG invests in the Top 50 largest companies in the S&P 500. Seems to be outperforming the SPY. While it does sometimes underperform SPY in certain years but it outperforms more than it underperform. Overall, seems to be beating the benchmark
That's a nice fund to know about XLG. I Wonder why its expenses are .20 however if its just a passive index. alll the sp500 funds are much less. Not that even this difference makes much of a difference in performance, but still.
All company eventually fail and die. ETF based on indexes do the cleaning automatically for you, picking the winners and discarding the losers. Why would you want to do that manually and pay taxes for rebalancing while ETFs of broad index do that for like 0.03-0.1% ? Also why waste time to do it yourself while commission select the best companies to be added or removed to the index ? If you want the top 50 companies of SP500, just take an ETF that does that automatically for you, like XLG. You can compare XLG to VOO there: [https://portfolioslab.com/tools/stock-comparison/XLG/VOO](https://portfolioslab.com/tools/stock-comparison/XLG/VOO) Basically for the recent month XLG perform significantly better. For the last 10 year, the perf is basically the same and the same and the correlation between te 2 funds is 0.95... So it is just more of the same. Only that XLG is less diversified. If there is a tech bubble like in 2000, and it pop like in 2000, with 44% of the index in tech for XLG vs 32% for VOO, the crash would be even worse. Higher risk and potentially higher returns.
I choose to buy XLG while I’m young. In a few years I’ll diversify more. I believe these top companies will keep outperforming
Is XLG calls a better move than SPY for now?
Personally I've always thought VTI was too much. I buy VOO so I'm buying 20 winners and 480 losers, but I buy them all because I don't know which loser might be the next NVDA. With VTI you're buying 20 winners and what, 3500 losers? It's over diversification and while both VOO and VTI are cap weighted, because VTI has more holdings you're getting less exposure to the winners. I think the article is reasonable in recommending QQQ and VUG as alternatives. I don't think VTI is a terrible holding, I just think VOO is better. Also I like XLG which is just the top 50 companies from the SP500.
Serious answer...if you want long term growth, put half of your gambling money in something that follows the S&P 500. Something like VOO or XLG, whatever brand you like. Then you can take your other 50% and put it in fun stuff to try and make more than the S&P 500. NVDA, GME, AAPL, GWW, again whatever brand you like. Once you learn more, then you can put 25% of your fun money into Options. Once you master all of that, then you can change your percentages around to make your money make money for you. 🤑
Look at XLG, it is the Warren Buffett of ETFs and has a 5 star rating. If the Fed cuts rates the big dogs are going to get a lot bigger. Own the Top 50 US Companies and you will win big in a low rate environment. These companies will also do well if we have a recession. They are growth names and defensive names all in one easy to buy package.
Or you could just invest it XLG (top 50). Or MAGS (magnificent seven). If you felt like going that route.
A market weighted index already has a ton of exposure to the top stocks in the index. Which is why I ultimately prefer to own individual stocks. At least that way I control what I own, and what I don't. But I'll take a look at the XLG. Thanks.
But literally invest every dollar u can into index funds. VOO or XLG imo
or take a look at XLG if you don't want to play indi stocks and want a more concentrated part of the index
Closest would be XLG what holds the largest 50 companies by market cap
I own Oracle in the XLG ETF and they are a very small part of that index for a reason. Nvidia is the leader in AI and that is the stock you should own.
If you need the money in 3 to 6 months I would keep things safe with a high yield savings account or treasuries. No one can tell you what the market will do month to month. That being said my favorite ETF is XLG currently (S&P Top 50 fund) these are biggest 50 companies in the US with great earnings and growth. It is up big so far this year and over the last 5 years. No one can guarantee those positive returns in the future. I also have QQQM and SPLG as my core holdings. I am also up big on Nvidia too, but I can't guarantee any returns over the next 3 months on that stock either. Nvidia could go up another 20% or have a 20% correction at any time. Good luck to you!
Today nearly 90% of vol from XLG is from NVDA. S&P Uno
I just want to start by saying this is a fantastic discussion, exactly what I come to this sub hoping to read which is informed ideas. None of us know the "right" answer, all we can do is extrapolate why we expect what we expect will happen. Personally I do think that NVDA is the new CSCO. I think the similarities are striking, both are hardware providers at a time where hardware is driving their growth. Both have the same flaw, they have competition that will eventually catch up, and they don't have the recurring revenue, other than companies primarily buying more of their hardware. As I understand it they (NVDA) are working on this to create more of an ecosystem that will help bolster long term growth. I'm just not sure that it will happen. I personally do not own any NVDA but have ample exposure through VOO, SOXX, QQQM ang XLG. I am concerned about the concentration at the top of the S&P 500. What had been the Mag7 is now really 3 companies (AAPL, MSFT, NVDA) making up 20% of the S&P 500.
Why not just a buy a more concentrated version of SPY called XLG. It will get higher returns than the SPY most years because it is concentrated in 50 stocks instead of 500. If beating the S&P 500 is your goal, most years the XLG will do it. You do introduce higher volatility though with less diversification in the ETF. Just saying!
Here is a possible path for you: 80% SPLG 26% 1 year return 10% XLG (S&P Top 50) 5 Star fund ( The best of the best American companies) 31% 1 year return 10% QQQM (Nasdaq 100) 31% 1 year return For long term investing these 3 ETFs give you diversification and growth you want
You need an AI play OP and the easiest way to get it is with XLG (S&P Top 50 ETF) The companies in this ETF are the bluest of the blue chips and they mint money hand over fist each quarter. You have instant diversification with this ETF and you have all the major sectors of the economy covered as well. Buy this ETF on a regular basis and you will do awesome. [https://www.invesco.com/us/financial-products/etfs/product-detail?audienceType=Investor&ticker=XLG](https://www.invesco.com/us/financial-products/etfs/product-detail?audienceType=Investor&ticker=XLG) Picking individual stocks is hard and picking winners over the long term is hard for investors as well. The best idea is to own all of the winners. No one knows which companies will win the AI game long term, but if you always own the big players you win the game no matter what. This ETF has all the winners in one ETF that you can buy with any amount of money anytime. If you want to own 500 companies go with the SPLG
XLG is like 30% apple, Microsoft and nvdia. not financials.
Buy the XLG if you want exposure to financials. The XLG is the Top 50 companies in the US and contains JP Morgan, Visa, Mastercard and leaves out the other garbage. Most banks are not increasing profits or revenue in the current environment and so owning a basket of them is not smart.
I don’t know that Much when comes to ETF. I have 1K to invest. And looking in some advice what I can look for that my money can grow. I am more interested in long term investing. So far I really like the ETF XLG
Personally I think VTI isn't worthwhile, VOO is better and VOO (and the mutual equivalents) make up the majority of my retirement funds. But VOO has a similar fallacy as VTI. While VTI has about 1900 losers, VOO still has about 400 losers. And because these indexes are cap-weighted you aren't as diversified as you might think. So for me, my other two index funds are QQQM (nasdaq 100) and XLG (which is the top 50 companies). Not saying I'm right and they're wrong. Just saying this is what it is.
Other options to consider are short T-bills with some of the money or SPLG (S&P 500 fund with the lowest expense ratio just 0.02%) I like the XLG as well, it is the S&P Top 50 ETF and it is filled with blue chip stocks that all make money hand over fist. It has an expense ratio of 0.20% which is the same as the QQQ. Returns are better than the S&P 500 so I own both. QQQM instead of QQQ for lower expense ratio 0.15% instead of 0.20%
Just bought XLG today going put 10% of my portfolio and hold for 25 years
Tons of Blue Chip non-tech stocks in the XLG, it is my new favorite. I buy some every month.
liking XLG more than QQQ, like how they been around from 2006 and 10% return right
You can't go wrong buying high quality companies with great earnings and as long as the index funds you buy have those you will do well. No one can predict the day to day movements of the market but the market always rewards high earning companies over time. Look at XLG and SPLG for today to see the return spread. That happens time and time again.
>but sounds like XLG has international exposure It does not. International revenue is not the international diversification that actually matters, capturing the imperfect correlation between markets is. Just because a technology will be important for the future doesn't mean it will have better returns. Often just the opposite in the long run: everyone else thinks the same and it becomes a bubble, as the companies may be fine, but the stock gets bid up more than their actual performance can support. A run of under performance doesn't suggest it will continue to do so, as valuations matter in the long run and favor can swing very quickly. Valuations seem to favor ex-Us right now, exactly because of the US's great recent run. The economy and stock market aren’t the same thing, they may even be negatively correlated in some ways: https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1745-6622.2012.00385.x I have links that can support all of this if needed.
Appreciate the insight. just didn't want to load US tech but sounds like XLG has international exposure so I am happy about that. thanks again. Looking to be super aggressive now
You will want the AI exposure as well that Europe doesn't have. Europe does not have an Apple type company. They don't have an Nvidia type company yet unless ARM does something. Bottom line you don't need exposure to Europe. These American companies make plenty of Euros and that is all you need. Euros turn into plenty of dollars and share buybacks that benefit you over time. I don't like the Expense ratio in the EFG. XLG expense ratio is only 0.20% while the EFG is 0.36% for lower returns.
Just buy the XLG and call it a day. All 50 of these companies make a large percentage of their profits overseas and you get plenty of International exposure with them. Also there is an American company that mirrors all of the foreign ones you mention. If you want something like Novo Nordisk the XLG has Eli Lilly and Abbvie in it. The only big company that does not have a US equivalent right now is ASML because they have perfected the making of advanced equipment for semi conductor production. So what I do in this situation is I buy a few ASML shares to make sure to have it represented in my portfolio. You can buy Taiwan Semiconductor for the same reason if you want that as well. Again other than those two examples the XLG has you covered in terms of concentration and also International exposure that is for sure.
Recency bias, the rich has been getting richer for quite a bit of time. Even mathematically, small > large and value > growth which is exactly the opposite from what you're going with with XLG.
You will not beat VOO going forward. Some of the stocks you mentioned will underperform for some reason. You can't time the market and win. There is always a change in the winners and losers and index funds change the allocation for investors automatically and that is the secret. You are trying to time the market and when do you think the right to sell is? If you want an aggressive strategy buy the QQQM or the XLG, but don't place big bets on Tesla and stocks like it because the future for any of these companies is not guaranteed at all. There is definitely a tech company that isn't on anyone's radar yet that will challenge Nvidia, AMD etc, do you know what company it is? That is why you buy a bit of everything and you win no matter what.
KO is a value stock that goes up slowly and steady over time. It will not make you rich quickly but when the markets are going down KO is a safe haven stock because even during the depression people bought sodas. As others have said just buy index funds that mirror the SP500. It has a basket of consumer staples stocks that will generate healthy returns in good times and bad. You can also look at the XLG is you want a more concentrated portfolio. This ETF tracks the Top 50 companies in the S&P and also has great returns over time.
The only sane thing to do with $100,000 is to invest in index funds like the S&P 500 (SPLG) or if you want a little extra risk and maybe higher returns buy a fund like QQQM or XLG with part of the money say 10%. After you buy the index funds you leave them alone and let them grow over time. If you want to day trade or margin trade just skip the part where you lose all of your money and give it to me and in a decade I will have $200,000 or more and you will have nothing. Margin and day trading is playing with FIRE and ordinary swings in the market can quickly destroy your wealth, don't do it. To margin trade effectively you have to learn about call and put spreads to limit downside risk and most people think they are geniuses and they will make until you wake up one day and you get a margin call because your options blew up. Making money is a marathon, not a sprint. I have no kids and no dependents and I got rich the index fund way. That is the only way over time. $100,000 is a lot of money and has the potential to change the arch of your entire life if you invest wisely.
Index funds are the best for retirement accounts. The most popular index funds track the S&P 500. My favorite S&P 500 index fund is SPLG because it has a very low expense ratio. 0.02%. You also can't go wrong with the XLG or the QQQM as well. These other two funds are more up and down but over the long term have generated massive returns and should continue to do so. The ratio in my brokerage account is 80% SPLG with 10% in the XLG, 10% in the QQQM. This is the ratio that I allocate new money at and it has worked very well over time and because these are long term holding I haven't sold any shares in these since 2021. I am adding shares every month when I receive income as well.
I’ve done it recently. I sold off XLG for more FBTC, CLSK, MAIN, and TSLA. No regrets so far (even with Tesla. lol ). CLSK is expected to hit between $50 and $70 by the end of the year. I’ll sell that off later to buy more MAIN and TSLA. Also, I may start a position in SPGP for the hell of it.
If you must leave VOO maybe just do XLG. At least that will adjust with the S&P top 50.
Or you can buy XLG etf which tracks Top 50 stocks
Given your explanation it is a perfectly sensible thing to try, though any of the other five stocks you mention seem better than TSLA to me for at least the midterm. Also while you may not want have VOO here, check out XLG and FNGS as a posible base position.
When looking at the overlap don’t look at the % of holdings overlapping, look at the overlap weight. For example XLG is 69% weighted overlap with SCHG and VOO is 53% weighted overlap with SCHG. Both are still high overlap but XLG is even higher in terms of concentration.
XLG is not a direct equivalent to VOO or SPY or SPLG. XLG is a concentrated fund of the top 50 or so largest companies within the S&P 500. So it excludes the remaining 450 or so that are in VOO and the others mentioned. If you are including a growth fund (QQQM/SCHG) in your 3 fund which you are then you’re going to be concentrating on those largest companies even further. I would stick with VOO or SPLG (as it has a lower expense ratio than VOO). But in the end VOO/SPY/SPLG and other S&P 500 index funds will be within .1 or so percentage points. They are all 99.95% the same thing, so stick with VOO or SPLG for that core fund.
Thank you so much. This is very helpful. I definitely think having those are manageable as compared to my 14 funds it’s too complicated. I did notice XLG has been outperforming VOO it does have higher net expense ratio and gross expense ration + 0.17%.
I’d just buy XLG and let the index work it out