S&P 500 vs Total Stock Market? [VTI vs VOO | VFIAX vs VTSAX | FXAIX vs FSKAX]

[@williamwall5081]

You do an excellent job Nick! Thank you.

[@nickdoyle-achievefinancial2464]

Thanks William!

[@Guest-dl2vw]

Looking back in time we are in VTSAX, which is an excellent stock index fund. However, I see where VFIAX has a little less variability; thus, were I to do this again I'd probably go with VFIAX, but the difference in overall performance is negligible/

[@jorge7967]

Hi Nick. My 401K has many funds that follow Russell based ETFs. Do you have any opinion on the Russell funds in general and in particular the Vanguard Russell 1000 Growth Index Fund ETF?

[@nickdoyle-achievefinancial2464]

Hi Jorge! I think the Russel indexes are fine, especially if they are the only ones offered in your 401k. They appear to have slightly higher fees, but are still quite low and it appears they are market-cap weighted. I would personally try to get the basic Russell 1000 to get value & growth. A lot of people like to tilt towards growth, which is fine if you're comfortable with the risk. I hope this helps! This gave me a good video idea. Thanks!

[@nutria12247]

You seem knowledgeable enough to use a small cap fund to get your desired exposure to small cap stocks, when combined with a 500 fund. This would give you more control than a total stock market fund.

[@nickdoyle-achievefinancial2464]

Thanks Jeff. I prefer total market funds. I explained why i don't factor invest in another video: kzbin.info/www/bejne/aKqxonVmpJmjbpI.

[@Feyen00rder]

What do you think about VanEck MOAT ETF?

[@nickdoyle-achievefinancial2464]

I hadn't heard about it until now, but I'm not a fan of active management. They are charging a 0.47% annual expense ratio to pick ~50 stocks, compared to 0.03% for VOO with 500 stocks. 0.44% extra annual expenses compounds to a lot over 30-40 years, and SPIVA data shows ~80% of active funds underperform the index long term. Since the inception of MOAT in 2013, it has underperformed VOO by 0.03%, while taking more risk. I don't see a reason to pay someone to take more risk for me and most likely underperform the index.

[@Feyen00rder]

@@nickdoyle-achievefinancial2464 VOO is much more volatile in crashes. In corona VOO crashed 32.3% and MOAT 23%. And the last 5 years MOAT outperformed VOO and their blend changed more to growth

[@nickdoyle-achievefinancial2464]

Hopefully the outperformance continues.

[@RB-je3yj]

I began in 2012 with 150k vtsax voog vti swppx I'm at 600k!!

[@nickdoyle-achievefinancial2464]

Nice, that's a great return! 😀 VTSAX is my favorite fund.

[@RB-je3yj]

@@nickdoyle-achievefinancial2464 The key is to reinvest your dividend and keep investing it's a marathon not a sprint!!

[@nickdoyle-achievefinancial2464]

Totally agree!! Time in the market!

[@kacealan3619]

Pro tip : you can watch series at flixzone. I've been using them for watching lots of of movies during the lockdown.

[@zaidendeandre5682]

@Kace Alan Definitely, I have been using Flixzone} for since december myself :D

[@yugarithen4342]

What's the percentages of mid & small cap do i need to add to the s&p 500 to replicate vtsax?

[@nickdoyle-achievefinancial2464]

I addressed this in my video on the extended market index: kzbin.info/www/bejne/joS3gKpras9-gZI. I hope this helps!

[@gautamvishwanatham7512]

I am trying to understand difference between Dow jones total market index vs CUSP index , meaning fskax vs vtsax , this year want to pick one and set up auto investment. Could you please explain it

[@gautamvishwanatham7512]

The other option is I am investing IVV and because I don’t like small cap I am also invested in FSMDX for mid cap , how do you think if I follow 80 - 20 rule IVV and FSMDX ? This is in my taxable account, this approach vs just buy one total market fund , the problem with latter is it’s weighted so not accurate exposure to mid cap companies that I am interested in

[@nickdoyle-achievefinancial2464]

Hi Gautam, this is a good idea for a video. I personally consider VTSAX & FSKAX equivalent (or equivalent enough) in regards to market exposure and hold both in my portfolio. In my taxable account, I prefer Vanguard funds since I have the option to convert them to ETF shares and transfer to other brokerages in the future. It's very minor, but I like that flexibility to change brokerages if I desire. In tax-advantaged accounts, I don't care since I can exchange the funds without tax consequences. For IVV+FSMDX, if you have more conviction with this approach I think it's good enough. I am a big believer in having the total market exposure, but small caps are only 9% of the market currently. It probably doesn't matter much if you exclude them and overweight mid-caps a little. I hope this helps, thanks for your support!

[@gautamvishwanatham7512]

@@nickdoyle-achievefinancial2464 nice explanation, I decided IVV and FSMDX , IVV because it’s s&p 500 and then FSMDX for mid cap .

[@gautamvishwanatham7512]

@@nickdoyle-achievefinancial2464 in taxable account, does it matter etf or index fund ?

[@nickdoyle-achievefinancial2464]

Hi Gautam, ETFs are generally a bit more tax-efficient but many of Vanguard's mutual funds get the benefits of ETFs. I have a video on ETFs vs mutual funds where I summarized what I thought are the most important points from a book on ETFs. kzbin.info/www/bejne/Y4HKkpdjbMuhbck

[@Atlas_21]

What about international stocks? No great companies overseas?

[@nickdoyle-achievefinancial2464]

Yes, there are great companies overseas and I invest in them at ~market cap weight. I have a couple videos on international stocks: Best International Stock Funds: kzbin.info/www/bejne/j5rNgmOiirWNba8 Vanguard Total World Index Explained: kzbin.info/www/bejne/hYXTgYGairdlnZY Should You Invest in International Stocks? kzbin.info/www/bejne/rJXCfJarmb-iabc Thanks for watching!

[@akin242002]

I like the S&P 500 because it has smaller dips in recessions. Therefore SWPPX, FXAIX, FNILX, SCHX, IVV, or VOO for me. Although total gains will slightly favor Total stock market funds.

[@nickdoyle-achievefinancial2464]

That makes sense if you prefer the smaller dips. They are so close anyways! Thanks for watching!

[@klmasi]

Play at 1.25x. I'm just doubling it and passing it to the next guy. You're welcome.

[@Fresh4370]

Why do people invest in FXAIX and FSmax instead of the total market one? Aren’t both of these the same as FSKAX ?

[@nickdoyle-achievefinancial2464]

Hi Alex, thanks for watching! I made a video that addresses this question titled "Invest in the Extended Market Index?" kzbin.info/www/bejne/joS3gKpras9-gZI

[@prettypoppin_552]

Limited options. Like in 401k's for an example. Also from my understanding FSKAX and FXAIX are heavily weighted towards large cap companies so having FSMAX gives you more exposure to small/mid cap companies.

[@nickdoyle-achievefinancial2464]

Reminder: I am helping analyze the details to help you decide for yourself, I am not recommending you buy these funds. Check out: Should you Invest International Stocks? kzbin.info/www/bejne/rJXCfJarmb-iabc Asset Allocation - Three-Fund Portfolio: kzbin.info/www/bejne/iGjIooVtfMyFprM

[@dmg-6449]

It's so wonderful to have young people speaking about investing. I wish I had learned these simple concepts decades ago. Instead, I was conned by one "financial advisor" after another pushing expensive mutual funds or their stock pick of the month and churning the portfolio. Had I simply invested in Vanguard's total stock or the S&P 500, I'd be in a different place today. My children will benefit from my mistakes and the wonderful advice of these young investors. Thank you, Nick Doyle!

[@nickdoyle-achievefinancial2464]

I was fortunate to have an uncle that started sending me investing and asset allocation books in my mid 20s. Thankfully, I actually read them and found a good path early. I'm trying to help others do similar 😀. Even those later in life still have many years or decades left. Thanks for watching!

[@kevinlue4756]

I like VOO, but I'm considering adding VTI

[@nickdoyle-achievefinancial2464]

Both are great funds! If you already own VOO, you could always do 80% VOO + 20% VXF to roughly equal VTI.

[@EnzroGreenidge]

Tux!

[@davidbosshart4448]

Thanks. Is VOO better for a taxable account vs Fzrox?

[@nickdoyle-achievefinancial2464]

You can research this more to be sure. I think VOO and VTI w/are marginally more tax efficient since ETFs can generally avoid distributing capital gains. Vanguard has a patent that allows them to do this with the mutual fund versions of these ETFs as well. The fidelity fund has distributed minor gains, where the vanguard funds have not (only dividends). I have all my taxable investments in vanguard funds. Hope this helps! Thanks for watching!

[@davidbosshart4448]

@@nickdoyle-achievefinancial2464 thanks. So you choose to use funds over etf’s in your taxable accounts? I assume you don’t believe taxes make much of a difference?

[@nickdoyle-achievefinancial2464]

Many Vanguard mutual funds are as tax efficient as ETFs: www.bloomberg.com/graphics/2019-vanguard-mutual-fund-tax-dodge/

[@hmj8469]

which fidelity is the most tax friendly for a brokerage (taxable) account?

[@nickdoyle-achievefinancial2464]

I think it depends on what you're optimizing for. If i'ts to avoid dividend taxes and get more growth, I believe FSKAX has had a slightly lower dividend than FXAIX historically. At least the TTM yield on morningstar for FSKAX is 1.45% VS FXAIX at 1.6%. FSKAX is paying less in dividends, which could mean lower taxes (assuming they have the same amount of qualified dividends. I don't think that would differ much between the two). FSKAX may result in slightly more capital gains long term, which you pay tax on later when you sell. Since they are ~80% the same, the difference is minor. I personally would just consider them equal for tax purposes, but there are minor differences if you are inclined to optimize accordingly. Hopefully this helps!

[@FindingFinancialFreedom]

Great video and breakdown between these funds!

[@nickdoyle-achievefinancial2464]

Thanks! I'm glad you liked it!

[@Guest-dl2vw]

Nick, excellent, wonderful Video; Bravo. A lot of information useful to the lion's share of investors. Your audience--me well included! --will undoubtedly benefit from the Video. Listened again on 4/19/22: A total Class presentation of the topic. I'm surprised that the Fidelity funds seem to do a little better than the covered Vanguard funds. This, I presume, is attributed to Fidelity having a little lower expense ratio. Great job Nick; thanks again.

[@nickdoyle-achievefinancial2464]

Glad it was helpful!

[@DaddyDebt]

thanks for sharing these stock tickers. Sometimes it's so hard to find the symbols and know the difference

[@nickdoyle-achievefinancial2464]

You're welcome, I'm glad you found it useful!

[@Northdallasguy00]

VTI gives you about 23% more diversity, not sure why anyone would not want it.

[@nickdoyle-achievefinancial2464]

I agree completely, I like the extra diversification! In my 401k we don't have the total stock market, so I have to use S&P 500 + extended market to approximate the total stock market.

[@nola504boy1]

The extra diversity isn’t always a good thing. Those bigger companies in the s&p are proven.

[@UK-fg5tq]

In total market index, you get both winners and the losers so it's not truly diversified as it looks.

[@personalfinance7265]

Great breakdown, there are so many options and sometimes you might duplicate accidentally. Currently I have position only in VYM

[@nickdoyle-achievefinancial2464]

Thanks, glad you liked it! Why only VYM?

[@personalfinance7265]

@@nickdoyle-achievefinancial2464 I like to do my research and invest in individual stocks where I have been able to have amazing gains over the years. However, I would love to build VYM into a big position which will serve as an anchor to my portfolio and in the future provide me thousands of dollars of tax-free dividends since it has a high yield. The other indexes are reaching record highs week after week being pulled to new highs by big tech. I bought Tesla at $35Billion and SP500 had to buy it now at $600Billion, didn't like that ..

[@nickdoyle-achievefinancial2464]

That's not an issue with the Total Stock Market Index. It's held TSLA for years. Good luck with individual stock picking. I have a yearly average return of 15.2% from indexing (19.6% in 2020), which is enough for me. I focus on increasing my income from my job. Interesting strategy with VYM. Are you building your entire portfolio in a taxable account? If using a Roth you can get tax free growth and dividends.

[@TheSorrowWithinMe]

Why wouldn't you pick vig? Much better dividends and growth over vym.

[@personalfinance7265]

@@TheSorrowWithinMe Higher Yield, More Diversified, Cheaper in Valuation imo

[@jononfirebudgetinginvestin3897]

Just found your channel!! I invest in both haha

[@nickdoyle-achievefinancial2464]

Welcome! Do you prefer one vs the other or have a target allocation for each?

[@jononfirebudgetinginvestin3897]

@@nickdoyle-achievefinancial2464 I do an even 25% allocation in each :) the rest of my portfolio is VGT, ARK ETFs, and then my safer ETFs like utilities, finance, and healthcare

[@Guest-dl2vw]

@@jononfirebudgetinginvestin3897 Sounds like an excellent allocation but wouldn't it be simpler to simply go with Vanguard VTSAX and VBTLX, say 70%-75% VTSAX and remainder in VTBLX?

[@jononfirebudgetinginvestin3897]

@@Guest-dl2vw I actually don’t invest in bonds yet cuz I do a super aggressive strategy cuz I’m young. But once I’m older I’ll do a bigger allocation in bonds

[@bingbong3643]

@@jononfirebudgetinginvestin3897 I go 75 stocks and 25% bonds once you retire.

[@julhe8743]

💯💯👏👏

[@DoubleJabSlipRightHand]

Thumbs down on every video where someone tells me to "smash" the like button.

[@nickdoyle-achievefinancial2464]

Thanks for watching!

[@DoubleJabSlipRightHand]

@@nickdoyle-achievefinancial2464 never again, virgin beta-male internet boy

[@julhe8743]

@@DoubleJabSlipRightHand ungrateful, that is the minimum that you could do for getting free information. If you want to have good things in life start with gratitude !!!🤯😳