If you’re building a portfolio around one US equity index, would you choose the S&P 500 index $VOO or the total US stock market $VTI ? The S&P 500 gives you roughly 500 large US companies and represents about 80%+ of the US market cap. The total market index adds mid, small and micro cap companies, giving you exposure to essentially the ENTIRE investable US stock market. Historically, the S&P 500 Index has had periods where it outperformed the total market, particularly when large caps were leading by a large margin. But over LONG periods, the performance difference has generally been relatively SMALL. And which is SAFER, less volatile? They’re both 100% stocks, so neither is “safe” in the traditional sense. Let's agree on that... 😆 The total market is more diversified by company size, while the S&P 500 is more concentrated in large companies. Personally, I think the more interesting question isn't which one is better, but which approach makes the most sense for YOU and your goals and circumstances. Which would you use as your core US holding.... The S&P 500 or total US stock market? If you'd like to see the performance breakdown of VTI v VOO with long term data and the risk profile of VTI, I just dropped my latest ETF deep dive. PS. let me know which ETF you would like a deep dive in next as well! https://youtu.be/xetF2QJ_2L4
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14 Comments
Michael Conroy@conroy119 · 5h
After much internal debate, ive settled on SP500 as a core holding. But we also get exposure to the total US market via all-in-one funds.
Marcos @mcolodner13 · 5h
My portfolio is mostly VOO and VGT, with 15% in VXUS to lower the volatility when us stocks are not doing very well, and around 10% in crypto
SammyD @wallstreetmexican · 5h
VOO. When building a portfolio, it never makes much sense to spread your money over 3500 companies and 31%-41% are already mega cap companies which are in the Top 500 companies like VOO. Especially right now in the ai boom , diversifying into sectors that aren’t giving you a good return doesn’t make sense. Yeah you can hedge against losses better with VTI , I think all that means is you’re playing it safer. I which at that point, it’s better than a HYSA earning 4%.
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