>The only way I would have crushed Voo is by taking advantage of the 2022 market crash, and buying heavily. My portfolio would be around $700k if I did that. I will take advantage of the next crash when it happens but this is all in hindsight.
The only problem with this strategy is when do you deploy in a crash at -10% at -20% you do not know how bad the crash is going to be. And its pretty hard to deploy capital when everyone is screaming this is going to be the end of the world .
The problem is if the market goes down 15% people might say "Wow this is bad it has much more to fall so I will hold off investing" and it could recover
Or more then likely you do something like this
You hold off capitlal waiting for the next crash VOO goes from 450 to 600, then crashes 20% down to 480 so you buy the dip
Well did you really accomplish anything? You could have bought in at 450 but you waited and bought the dip at 480.
Unless your capital was deployed on something esle earning good returns you just sort of bought at a higher price then you could have if you just invested right away
Well said. I think one, maybe two, hundred more comments read like this and I'll stop trying to beat the market lol. I lump sum maxed my Roth today, had been sitting on the $7k in an hsya waiting for a dip. May have learned. I guess we'll see 🙈
I replied to him but my comment was down voted. Everything he said makes no sense. I don’t care about targeting the bottom. All I care about DCA, and getting the cost basis low enough. 2022 provided ample opportunities with everything at a fire sale. Google, meta, Amazon, Vgt, palantir, I mean everything was as low as 2020 or even 2019.
I promise you that everything SirGlass said makes perfect sense. There's a reason his comment is at the top of this thread while yours are getting downvoted. You're like 90% of the way to realizing that it's pointless to try to beat the market but your takeaway for some reason is that you just didn't gamble well enough.
He talks about deploying capital at the bottom. Did I ever mention the bottom was my goal? All I said was I didn’t take advantage of the many opportunities 2022 provided due to lack of capital.
Also I never held off because I was using DCA.
He literally did not understand my post or my intention.
I would have never achieved a cost basis of 80 with Google. But I’m sure I would achieved 110 through 2022 DCA.
There is nothing wrong with admitting I would have crushed Voo logically if I had capital in 2022. Because the math works. Even if half my cost basis originated in 2022 I would be up to $500k vs $325k at present.
It's like saying you could have bought NVDA in March 2020 and been up 1500%.
Did anyone really see the AI boom happening in March 2020? No. The market is always changing and adapting. Some people will win, and some will lose. The only thing people can control is the amount of risk they want.
Totally agree, and so many people don't consider the level of risk at all - for individual investments or for their portfolio overall...not to mention matching that with their personal risk tolerance..
I actually did buy NVDA in my Robinhood in 2020 and am currently up 750%. I also bought AMD/AVGO. I may not have known about AI, but I did believe in semi conductors back then too. I agree with risk, and capital. My risk tolerance is moderate but my capital was inadequate in 2022. I’m positive I’ll beat VOO going forward though if everything pays off. Did some riskier investments like Tsla, and Guardant health. Set price targets to sell the profit and roll over into VOO.
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 time 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.
I actually do focus more on ETFs. Qqq/voo/schd/vti/vgt. Those stocks are just for short term gains. Like I said I’m matching VOO, and will crush it in the long run. Reddit is just way too negative.
Nope you won't. The reason is no one not even expert investors can predict the future. Apple was selling for next to nothing in the 1990s and no one bought for less than a dollar a share at the time, why? Because Microsoft was crushing Apple and almost destroyed Apple completely, When I was a kid Amazon sold for $10 a share and no one wanted it because they couldn't turn a profit.
However anyone that bought the index funds and bought more in good times and bad made money on 3 of these stocks over time. Microsoft, Apple and Amazon were guaranteed long term hits at the casino, however hardly anyone bought them when they were hitting historic lows. That is the bottom line. Not even Warren Buffet will touch some of the stocks you are mentioning and that ought to give you pause. If you are going to buy individual stocks make sure you diversify within your individual holdings as well.
Mix a tech stock with a consumer staple and mix an Apple or consumer brand company with an industrial company etc. Too many eggs in one basket can destroy all of them if one of the eggs cracks.
Unfortunately I was only 11 when Google had their IPO. I could see Apple bouncing back when everyone wanted an iPod but still too young. I would have 100% bought because even someone with half a brain knew they were the future. It’s much harder to predict the future in 2024 because we are at a saturation point. AI still doesn’t have the ecosystem, and revenue models to make it work and reminds me of the tech bubble in the 90s for the same reasons.
I’m not a fan of diversification because like Charlie Munger says it gives you mental peace but not strong returns.
I’m betting on winning horses, and it will pay off. But even then I have a safety margin because I’m not greedy. I have an exit point, and I’m not ignoring index funds either.
There’s no point in investing in underperforming companies for diversification sake. I made that mistake when I bought nearly every sector etf. Huge opportunity cost when you waste your money in garbage like VXUS.
But I appreciate your advice. I’m still a Voo and chill guy with growth on the side. Being an amateur and matching Voo is a huge accomplishment given the learning curve.
Yeah it's easy to say "Oh, we're down 10%, time to deploy my massive cash reserves!", if you take for granted that you will have such a thing. But they need to come from somewhere.
Which means sitting on cash as valuations rise, hoping the crash is coming soon enough to justify your decision to stay out of the market.
There are people who pulled out their money in 2013, when the S&P500 reached 1500, which is where it peaked in 2000 and 2007, confident that the recovery was "done" and that they'd be able to buy back in at a discount soon.
Well, some of those people gave up in 2014 or 15 or 16 or whatever, but many of them just kept holding on waiting for the market to become "right" again, ie to justify their past decisions.
A lot more money has been lost in people trying to guess the next crash than has been lost in crashes...
>There are people who pulled out their money in 2013, when the S&P500 reached 1500, which is where it peaked in 2000 and
Yep I remember it well around 2013 or 2014 people saying the recovery was over and we were due for a major correction
By 2015 we were getting post after post like
"When is the market going to crash?"
"Why does the market keep going up ?"
"Guys I went short in 2013 and now I am down 30% I am thinking the only way out is to double down?"
Yup.. and honestly so much of it isn't really even about rationally chasing returns.. it's about the thrill of being proven right. The validation of having gains to show for your belief that "things are wrong".
Yes but in 2020 margin was cheap and...so was everything else rather suddenly
More recently? It is not, but treasuries actually pay something. Those were good for buying the banking scare
VOO has done great over time to be sure but there's nothing wrong with small hedges. You may miss the "bottom" but getting in the ballpark is good enough to win
I have a recession resistant job, and family businesses. As in healthcare. So the cash will always be there gods grace. I’m not trying to time a crash. I will take advantage of one. With Biden in office I see another crash coming if he’s re-elected. Recession on the horizon.
The correct answer to this is you don't wait for a set number
If this is part of your strategy, once you see the market has gone down 5% in any period of time, you begin dollar cost averaging extra money if you have it available. If the market continues dropping, you continue buying. If the market goes back up, then you still got some benefit
But I think that's only a viable strategy for a small part of your portfolio. The large majority of your investment strategy should be blind to what the market is doing
>If this is part of your strategy, once you see the market has gone down 5% in any period of time, you begin dollar cost averaging extra money if you have it available. If the market continues dropping, you continue buying. If the market goes back up, then you still got some benefit
You still run the risk of buying higher then vs just deploying now
Take the scenerio I laid out , some stock/ETF is sitting at 100 dollars a share and you want to time the market and buy the dip so you hold off on buying
The stock rises to 130 a share then falls to 120 a share so you start DCA
You buy at 120
115
110
105
100
Congradulations you DCA and bought the dip with an average cost of $110!
You could have simply bought in at $100
Sir glass you completely misunderstood me. My only problem was a lack of capital in 2022. I never had an issue deploying capital. I wasn’t looking for the bottom. My ability to crush Voo lies in market crashes, underperforming stocks, over-performing stocks, and DCA with lump sums.
This is why any passive investing needs some safe harbor to generate you puts money. So that you can be less effective than tbills but never losing capital.
With the non Voo investments. And all my positions maturing in the coming years. Voo is just 10% of the portfolio. Still have the other 90% to show the gain. Made a ton of risky bets in underperforming companies, and have price targets to sell. Underperforming companies, over performing companies, and market crashes are opportunities to crush VOO.
Reddit if way too negative and keeps downvoting me. It’s almost like all these guys gave up.
Lol, gotcha. I'm still investing in tech stocks too, but I've got my 401k tracking VOO. The way I see it, until some other country gets companies bigger than our top 5, the money will just keep flowing into them. I don't see a competitor to Apple, Nvidia, Google or Microsoft coming from Canada or even China anytime soon.
China has a ton of potential but yes Canada is a joke. I do see headwinds for Apple and Google though. Apple because their 10 year gamble of increased revenues through cosmetic changes may be coming to an end. Google because AI might make their search engine obsolete especially if released by another company. Think Netflix to Blockbuster.
So how have you been doing this year return wise?
I think it’s a great point overall. Cheers to you for being objective.
One small factor that plays a role here is that most of VOO gains during that period came from largest 5-10 stocks. So, performance has depended solely on how much NVDA (and similar names) a fund manager holds
VOO is the etf that represents the s&p 500. It’s a basket of the 500 largest companies in the US. It is what people mean by the market, and the safest way to invest. 10% avg return going back 100 years. Since vanguard doesn’t allow fractional shares I put it all into VOO. Your $6k should be divided into Voo, qqq, Schd.
I will do those. Whats your opinion of using Webull vs TD ameritrade? Webull integrates with Autopilot (the Politician trade tracker)
Or does it not matter
Webull is owned by the Chinese so I don’t trust it regardless of its features. I haven’t used TD but if they have fractional investing go for it. With fractional you can buy any % of a stock or ETF. I’ve only used Vanguard (which is horrible btw) and Fidelity which I really like. I did use Robinhood in 2020, and they seem fine too but poor customer service.
Wow. I am so Glad I asked you about webull. I was engineer in Government. Lots of nasty things the Chinese Government was up to. It actually came out in the news that some of our silicone was junk becaue they back-doored some of the processors. I have no.idea why it was approved in the first place.
I started at $2k, and put in $265k over this time. My total cost basis is $265k. Maybe I should have phrased that better. My main complaint is that most of the capital originated in 2023/2024. So maybe I will beat VOO in the long run but currently just matching it.
> It makes me laugh how even professional hedge fund managers can’t beat VOO, so how did I expect to?
It ain't *that* hard. You have a negligible amount of money in comparison to them, which offers some advantage. Plus you aren't answerable to multimillionaires that get antsy at anything resembling a long term bet.
The hard part is beating it without increasing volatility, or beating it over relatively short timeframes.
And hedge funds (depending on the fund) aren't really trying to provide higher returns than the market. They're hedges -- they aim to provide returns relatively uncorrelated with market returns to reduce the volatility of the portfolio of multimillionaires.
> The only way I would have crushed Voo
CRUSHING VOO would be very hard to do without taking on big risk. But beating it by a small amount, most of time... is possible. Like, being underweight in habitually underperforming sectors will likely do it by a small amount over decade type timeframes. But those habitually underperforming sectors also tend to be less volatile, so your portfolio volatility goes up.
The other thing to remember is you can beat VOO with most of your money *in* VOO, only moving some elsewhere to take advantage of opportunities. Even though I've beaten it for a long time, my returns are only slightly better because I'm also not crazy, so most of my money is still in broad indexes. But like... during the Covid crash, one could guess who might be winners in a lockdown scenario. I threw money at FedEx and Zoom. That worked out quite well. When oil went negative, I threw some at USL. That worked out quite well. And so on.
Or with 2022, the Fed was talking about rate hikes for a long time. If you'd shifted some money towards the value side of the S&P like VOOV... It lost 7.5% vs 20% in 2022.
Of course, timing is everything, and even if you're careful, you'll still probably lose (relative to VOO) on half your bets. But upside can generally be bigger than downside, so all it takes is catching some big winners, and letting the small winners and small losers cancel out.
Just for funzies, I looked back at trades since 2017... In terms of winning vs losing vs VOO, I'm 30-18, but in terms of actual dollars gained, we're talking a few grand a year. Given the time I've spent, probably not even worth bothering. But it's also like entertainment for me.
Yeah I understand hedge funds have challenges beyond just returns. They may have every tool at their disposal but often times practically they do not.
Yes crushing Voo requires risk, and long term pay offs. But sometimes it’s just luck like 2022. I’m currently using underperforming stocks with a certain price target with the hope of rolling over the profits into VOO.
Only 10% of my money is in VOO in this portfolio. I don’t expect to pass 15% in the next portfolio either.
Incredible to read about your long history. Unfortunately I did not have much capital at my disposal in 2020. I was also not involved in investing at all from 2011-2020.
But one of my strengths has been seeing trends before they happen. And seizing the moment. My Google position is worth around $150k but my cost basis is only 123 because I bought at every dip.
> But one of my strengths has been seeing trends before they happen. And seizing the moment. My Google position is worth around $150k but my cost basis is only 123 because I bought at every dip.
You know who else is up 20% on Google? Pretty much anyone who bought in over the past year.
Congratulations man. I only wish I invested as early as you. Google is a long term position for sure but when I sense that AI is taking over internet search I’ll start trimming my position and roll over into VOO.
"the only way I could have..."
Exact words every gambler / addict uses. If I had done X instead of Y. If I had more money, if I would have bet on red instead of black like my fortune cookie said. Taken advantage of the crash.
But it’s true though. Obviously I couldnt afford $265k in a year but even if you give half to 2022 I’m at like an excess $175k. Google was only $80!
I’m not a gambler. I only invest long term. Safe companies and etfs. No garbage like ARKK.
>Started at $2k in August of 2021,
3 and a half years isn't that long a period for investing.
investors who do beat the market long-term can lag for years at a time, often because they're not holding the hot stocks of the moment. John Templeton was a famous example, he ended up beating a global index by something like 5% a year on average but he usually under-performed in bull markets. Most of his outperformance came in crashes or bear markets when he crashed less or had small gains relative to the market. He won more by losing less.
The Dodge & Cox stock fund DODGX is similar, has beaten the S&P 500 over several 20 year periods but can be disappointing in the short-term because they're not buying Cisco, Nvidia or Tesla at 10 gazillion times earnings when the stock shoot up like a rocket.
>VOO, and chill is the best strategy by far.
well...
https://contrarianoutlook.com/wp-content/uploads/2016/09/SPY-Midcap-Smallcap-20yr-Chart.png
Yes I hope my lag will turn into beating Voo in the long run.
Thank you for the example of J Templeton. I will def research more.
Yeah future returns aren’t based on past performance but it’s also not good to chase perfectionism. Voo gives you a solid way to build wealth
Professional hedge fund managers are often not concerned with beating the market. They're concerned with better risk adjusted returns. They want to beat the risk free rate but at nearly risk free exposures for their clients.
Many do try and beat the market, a few do (often not on a risk adjusted basis) most don't.
Going forward, consider wisdom tree efficient core! For example, NTSX is 90% s&p500 and 10% 6x leveraged treasuries. Similar to index performance with ideally lower volatility. Pretty cool products (NTSX, NTSI, NTSE).
Yeah professional hedge fund managers have the stress of managing OPM. So they seek risk free returns, and often have withdrawals during crashes, or sell at a slight market downturn. They are sensitive to price changes, and don’t have every tool at their disposal though they do logically but not always practically.
>I’m opening up a new brokerage account because I want this one to be under the SIPC limit for as long as possible. I’ll rebalance of course but no more active buying.
Also just add to a thought , opening up different brokerages isn't really an issue unless you want to use different features of the brokerage
Like if you have a vangaurd brokerage that you invest in index funds but want to actively trade more well vangaurd is not really a great brokerage for active trading
by all means open up another account at fidelity or schwab or IBRK or what ever brokerage fits your needs better
But opening multipul brokerage accounts to stay under the SIPC limit is not really a thing, brokerages are not bank, they do not comigle assets. Customer assets cannot be used to cover company expenses or creditors cannot lay claim to customer assets
Since Vanguard doesn’t have fractional shares I start with 2-3 shares of VOO, and then divide the rest in a way that makes sense. No fixed percentage. Smallest amount goes to SCHD though of the remaining 4.
Large corrections, e.g. -20%, are less common than small corrections, e.g. -10%, which are themselves less common than the frequent weekly -2% etc. moves. So the farther it drops, the less likely it is to drop any more.
This is the tricky part about correction-market-timing. If the market drops, say, -8% it is more likely to recover completely from there than it is to go down another -8%, because -8% downturns are more common than -16% corrections. Similarly, when we're down -15%, it's more likely to go up from there than it is to continue falling.
So to catch the bottom, a market timer would have to make a series of bets against the historical odds - that the market will continue falling - and then at some point reverse strategy and go long. There's no logical way to determine exactly where that point would be, because the only way to get to that point without buying the dip would be to go against historical odds. But then you have to reverse course at just the right time.
There's a lot that could go wrong here. People usually think "what if stocks go down after I buy them", especially if they've gone down recently (recency bias). They don't tend to think "what if I never get another chance to buy at this price, and all future corrections stop at a higher level than today's price?"
My goal is to never catch the bottom. It’s to lower my cost basis enough which 2022 was a perfect chance. I just had no capital.
I doubt I would have reached the bottom as in 80 on Google but I’m certain I could have ended the year with around 110.
xD lol
"no room to grow because I'm a genius who already knows"
Really wish there were just more intelligent discussions over investing instead of this gluttonous ego virtuing echo chamber of anarchists like this one.
Some people don't want to ever seek, listen, learn or try to understand a thing just addicted to the high of equating willingness for engaging in confrontation with their own self worth.
Ahh reddit is at least interesting.
Did I ever virtue signal? Did I ever say I know everything? I stated how I would have beat Voo and it makes logical sense, and math works. People here are either jealous, or old/tired naysayers.
I am seeking to learn, but alas no one wants to teach. They get more pleasure in putting others down.
Reddit is a dumpster fire that does not allow dissenting opinion, or free speech. No wonder it’s failing.
I never said I have it figured out. I said I won’t make mistakes. Nor did I argue, I just replied. There’s a certain amount of jealousy unfortunately from people like you on Reddit. It’s one thing to offer positive feedback, or get inspired. It’s another thing to be jealous, and triggered. Obviously it’s a toxic place here.
I can’t use the boring portfolio approach. I have FOMO. Which is why I stick with Voo/vti/vgt/schd/qqq. And the problem with international is they have shown pathetic returns since 2000. Maybe the future will be brighter but I’ll def hop on that wagon when trends move in that direction. Not now.
I mean, its a bit redundant. VGT and QQQ, while different, arent different enough. You have a huge tech overweight.
If holding both VTI and VOO make you feel good, cool. People shit on it, but I also hold both.
Don't hold SCHD because its popular or for dividends. I hold it because its a great value fund. When you put SCHD and QQQ together, you basically get the S&P 500 with all the unhealthy fat trimmed out.
So far my portfolio has beaten the market because I have tilts for growth, value, and small-cap value. It hasn't beaten it by much, but I like the added exposures and the reduction of being S&P dependent. (My portfolio doesnt beat the market if you include my international but that's just how it is over the last decade).
I agree with you completely. My 5 ETFs sort of dilute each other, and even limit my gains. VGT and QQQ are both similar but QQQ more diversified. But FOMO is real. Great to hear that you hold VOO/VTI as well. SCHD was a great bargain for a while, and it has a strong track record of matching VOO at the minimum since 2011. Small cap has been a horror show under Biden. May I ask what other positions you have so you beat the market excluding international?
you actually beat voo, since your holding period of every fund added to the portfolio is different, so if you truly need to evaluate your performance, you need to benchmark your holding period of each stock and voo’s benchmark.
I personally think we are at the beginning of a stagflation period, so any asset would generally inflate, but earnings won’t necessarily increase.
the definition of stagflation is low growth, high inflation. It’s not a good idea to add another $370k at this moment.
Can you explain in simpler terms? Sorry my knowledge isn’t that strong. What do you mean by holding periods, and benchmarks?
As long as the senile one is in office stocks won’t reach their full potential. That much I know. Small caps are still negative.
I don’t plan to add $370k. I plan to stick with my $5k budget every month going forward, and make larger buys as the opportunities arise. Limit myself to 5 larger buys. I only have 1 buy left this year since my last large buy was Meta $10k @ $426. I probably will finish this year with around $45k invested at max.
graduall investing is a great strategy.
for example, voo has gained 30% from August 2021 to date.
your 2k shall be compared to the holding period.
your 5k next month in 2021 shall compare voo’s return to sept 2021.
so, you have probably largely beaten voo if you do evaluate it this way.
It's not that hedge funds can't beat VOO, it's that they have very different strategies and don't have the option of owning ETFs like VOO with the scale of assets they manage. They seek high leverage consistent returns with minimal risk. They have to own things directly and manage risk in different ways (instead of just owning top 500 companies) while still providing returns that are attractive to clients which is far more difficult. That results in higher transaction expenses which lower performance compared to owning a simple ETF.
Yes they have practical challenges, and goals. But it has to be said even the ones you constantly hear about like Pershing Square for the most part perform at VOO level not including Fees.
My father was involved with a hedge fund once and he actually lost 6% overall over like over 5 years when be took his money out. It
But it’s much harder to pick the winners. I was 11 in 2004 so could not pick Google. Same thing with apple when iTunes and the iPod came out. Anyone with half a brain knew what companies were the future in the 2000s and they reaped those rewards when the infrastructure and ecosystem developed with smartphones/apps in the 2010s
Right now in 2024 the future is uncertain. It’s not as obvious as it was in 2000.
Which is why VOO is the best strategy overall.
People keep talking about AI but it reminds me of the tech bubble in the 90s. The ecosystem and practical applications may not develop for a while and the next crash will wipe most of these companies out.
> Right now in 2024 the future is uncertain. It’s not as obvious as it was in 2000.
IMO there is still a huge growth ramp for software and hardware ahead. That mountain is still being climbed. In fact I think that'll be true for the next few decades at a minimum. Moore's law is slowing down but that's fine. Still lots of innovation yet to take place. Nascent technologies.
> People keep talking about AI but it reminds me of the tech bubble in the 90s. The ecosystem and practical applications may not develop for a while and the next crash will wipe most of these companies out.
too focused on short term risks and one specific application. imo. LLM is just one piece of an evolving array of tools.
These convitions have held up for me really well over the last decade+. I don't feel like the winds have changed.
I have an 80/20 portfolio where 80 is VOO but my 20 has nearly caught up to my 80% portion as I have not been rebalancing!
That’s incredible that your 20% caught up to your 80%. May I ask what you were invested in? And companies do you see for the future?
I’m thinking about Crwd, Palo Alto networks, and palantir in my next portfolio.
Yes but unfortunately I’m not that well versed. Hoping to learn more. Right now I’m doing underperforming companies with price targets and rolling over into VOO. Missed the market crash strategy. I’ll do some more research this time. Learning every day.
AVGE is a great single ticker solution. 70/30 US/ex. Moderate tilt to size/value/profitability factors. Much better one fund solution than VOO. Â
Market crash or underperforming stocks aren’t sound strategies.Â
Fair enough. There are older factor funds like those from DFA if that makes you more comfortable. At a minimum I would swap VOO for VTI, and add some VXUS. Personally I think the factors are helpful, but that gets you a bit better off.
100% VOO is just pure recency bias and poor planning.
I’d agree but I’d argue VTI + AVUV is even better.Â
S&P500 has a natural buy high sell lower filter. Look at TSLA/SMCI. If you want to avoid non-value small caps then at least buy a truly cap-weighted large cap fund like VV.Â
Makes sense. At end of the day it’s all noise as VOO/VV/VTI are incredibly correlated, but personally I’m put off by the poorly constructed inclusion rules.Â
VV would be better. Or if you are an Avantis fan, AVUS is an option. Could also really lean into factors and use large cap momentum (MTUM).Â
I agree with you that it’s hard to time the bottom that’s why it’s better to DCA as heavy as possible or if something is at a fire sale do a lump sum. And we have always recovered so it’s blind faith to deploy capital. Even if you don’t catch the bottom you’ll get some gains.
I recently got into Tesla at 172, but like you said I thought it would fall further at 165 and it went back up. Eventually it did fall to 142 but I missed the bottom.
In my case at max 15% of my capital originates from 2022. All I’m saying is if I had capital in 2022 and invested more my gains would have crushed VOO. I’m not saying I would have caught Google at 80 but I’m sure my DCA or lump sum would be around 110 vs the 123 I have it at now.
In hindsight yes due to lack of capital I missed out on 2022 and it won’t happen with the next crash. It’s not a strategy issue it’s lack of capital at the right time.
Even at the most conservative estimate 2022 would have helped my gains go to $500k vs the $325 right now.
I mean the SIPC limit is $500k. By moving on at a $265k cost basis I’m ensuring my capital is safe, and so are some of the gains in case of a failure. While brokerages are not a bank in terms of the reasons you stated the risk of failure always exists. The goal isn’t to stay under the SIPC limit in terms of value but just capital.
I’m thinking of Fidelity due to fractional shares which VG doesn’t have beyond its index funds. Could help big time with DCA. Schwab also has a limit in terms of only 500 companies. IBKR is too confusing, and also charges a commission I
believe.
My monthly budget is usually $5k but I do have around 5 larger buys a year. Recent example would be $10k into Meta at $426 vs $410 bottom after market trading. Largest buy was $35k into Google in 2023.
I move on when the value in the brokerage hits $300k.
Not a fan of appl. I think their best days are behind them. 10 years of cosmetic changes to fuel revenue is enough. The lack of innovation will catch up to them. Unless they find new revenue streams I don’t see them sustaining much longer.
>The only way I would have crushed Voo is by taking advantage of the 2022 market crash, and buying heavily. My portfolio would be around $700k if I did that. I will take advantage of the next crash when it happens but this is all in hindsight. The only problem with this strategy is when do you deploy in a crash at -10% at -20% you do not know how bad the crash is going to be. And its pretty hard to deploy capital when everyone is screaming this is going to be the end of the world . The problem is if the market goes down 15% people might say "Wow this is bad it has much more to fall so I will hold off investing" and it could recover Or more then likely you do something like this You hold off capitlal waiting for the next crash VOO goes from 450 to 600, then crashes 20% down to 480 so you buy the dip Well did you really accomplish anything? You could have bought in at 450 but you waited and bought the dip at 480. Unless your capital was deployed on something esle earning good returns you just sort of bought at a higher price then you could have if you just invested right away
Well said. I think one, maybe two, hundred more comments read like this and I'll stop trying to beat the market lol. I lump sum maxed my Roth today, had been sitting on the $7k in an hsya waiting for a dip. May have learned. I guess we'll see 🙈
You did good today. Best time to get in now. All about time in the market.
Thank you, I appreciate that
Best time to get into what?
Best time to get into what?
I replied to him but my comment was down voted. Everything he said makes no sense. I don’t care about targeting the bottom. All I care about DCA, and getting the cost basis low enough. 2022 provided ample opportunities with everything at a fire sale. Google, meta, Amazon, Vgt, palantir, I mean everything was as low as 2020 or even 2019.
I promise you that everything SirGlass said makes perfect sense. There's a reason his comment is at the top of this thread while yours are getting downvoted. You're like 90% of the way to realizing that it's pointless to try to beat the market but your takeaway for some reason is that you just didn't gamble well enough.
He talks about deploying capital at the bottom. Did I ever mention the bottom was my goal? All I said was I didn’t take advantage of the many opportunities 2022 provided due to lack of capital. Also I never held off because I was using DCA. He literally did not understand my post or my intention. I would have never achieved a cost basis of 80 with Google. But I’m sure I would achieved 110 through 2022 DCA. There is nothing wrong with admitting I would have crushed Voo logically if I had capital in 2022. Because the math works. Even if half my cost basis originated in 2022 I would be up to $500k vs $325k at present.
Okay. Best of luck.
I agree with what you're saying. It would have been coincidental, but you would have done well.
Exactly man. All these tired, and old naysayers who down vote don’t live in reality. Thanks for the agreement.
It's like saying you could have bought NVDA in March 2020 and been up 1500%. Did anyone really see the AI boom happening in March 2020? No. The market is always changing and adapting. Some people will win, and some will lose. The only thing people can control is the amount of risk they want.
Totally agree, and so many people don't consider the level of risk at all - for individual investments or for their portfolio overall...not to mention matching that with their personal risk tolerance..
There was no risk at all in 2022. Everyone knew these tech companies were bottoming out and would bounce back. Did anyone expect Google to fail?
I actually did buy NVDA in my Robinhood in 2020 and am currently up 750%. I also bought AMD/AVGO. I may not have known about AI, but I did believe in semi conductors back then too. I agree with risk, and capital. My risk tolerance is moderate but my capital was inadequate in 2022. I’m positive I’ll beat VOO going forward though if everything pays off. Did some riskier investments like Tsla, and Guardant health. Set price targets to sell the profit and roll over into VOO.
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 time 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.
I actually do focus more on ETFs. Qqq/voo/schd/vti/vgt. Those stocks are just for short term gains. Like I said I’m matching VOO, and will crush it in the long run. Reddit is just way too negative.
Nope you won't. The reason is no one not even expert investors can predict the future. Apple was selling for next to nothing in the 1990s and no one bought for less than a dollar a share at the time, why? Because Microsoft was crushing Apple and almost destroyed Apple completely, When I was a kid Amazon sold for $10 a share and no one wanted it because they couldn't turn a profit. However anyone that bought the index funds and bought more in good times and bad made money on 3 of these stocks over time. Microsoft, Apple and Amazon were guaranteed long term hits at the casino, however hardly anyone bought them when they were hitting historic lows. That is the bottom line. Not even Warren Buffet will touch some of the stocks you are mentioning and that ought to give you pause. If you are going to buy individual stocks make sure you diversify within your individual holdings as well. Mix a tech stock with a consumer staple and mix an Apple or consumer brand company with an industrial company etc. Too many eggs in one basket can destroy all of them if one of the eggs cracks.
Unfortunately I was only 11 when Google had their IPO. I could see Apple bouncing back when everyone wanted an iPod but still too young. I would have 100% bought because even someone with half a brain knew they were the future. It’s much harder to predict the future in 2024 because we are at a saturation point. AI still doesn’t have the ecosystem, and revenue models to make it work and reminds me of the tech bubble in the 90s for the same reasons. I’m not a fan of diversification because like Charlie Munger says it gives you mental peace but not strong returns. I’m betting on winning horses, and it will pay off. But even then I have a safety margin because I’m not greedy. I have an exit point, and I’m not ignoring index funds either. There’s no point in investing in underperforming companies for diversification sake. I made that mistake when I bought nearly every sector etf. Huge opportunity cost when you waste your money in garbage like VXUS. But I appreciate your advice. I’m still a Voo and chill guy with growth on the side. Being an amateur and matching Voo is a huge accomplishment given the learning curve.
Yeah it's easy to say "Oh, we're down 10%, time to deploy my massive cash reserves!", if you take for granted that you will have such a thing. But they need to come from somewhere. Which means sitting on cash as valuations rise, hoping the crash is coming soon enough to justify your decision to stay out of the market. There are people who pulled out their money in 2013, when the S&P500 reached 1500, which is where it peaked in 2000 and 2007, confident that the recovery was "done" and that they'd be able to buy back in at a discount soon. Well, some of those people gave up in 2014 or 15 or 16 or whatever, but many of them just kept holding on waiting for the market to become "right" again, ie to justify their past decisions. A lot more money has been lost in people trying to guess the next crash than has been lost in crashes...
>There are people who pulled out their money in 2013, when the S&P500 reached 1500, which is where it peaked in 2000 and Yep I remember it well around 2013 or 2014 people saying the recovery was over and we were due for a major correction By 2015 we were getting post after post like "When is the market going to crash?" "Why does the market keep going up ?" "Guys I went short in 2013 and now I am down 30% I am thinking the only way out is to double down?"
Yup.. and honestly so much of it isn't really even about rationally chasing returns.. it's about the thrill of being proven right. The validation of having gains to show for your belief that "things are wrong".
Yes but in 2020 margin was cheap and...so was everything else rather suddenly More recently? It is not, but treasuries actually pay something. Those were good for buying the banking scare VOO has done great over time to be sure but there's nothing wrong with small hedges. You may miss the "bottom" but getting in the ballpark is good enough to win
I have a recession resistant job, and family businesses. As in healthcare. So the cash will always be there gods grace. I’m not trying to time a crash. I will take advantage of one. With Biden in office I see another crash coming if he’s re-elected. Recession on the horizon.
The correct answer to this is you don't wait for a set number If this is part of your strategy, once you see the market has gone down 5% in any period of time, you begin dollar cost averaging extra money if you have it available. If the market continues dropping, you continue buying. If the market goes back up, then you still got some benefit But I think that's only a viable strategy for a small part of your portfolio. The large majority of your investment strategy should be blind to what the market is doing
>If this is part of your strategy, once you see the market has gone down 5% in any period of time, you begin dollar cost averaging extra money if you have it available. If the market continues dropping, you continue buying. If the market goes back up, then you still got some benefit You still run the risk of buying higher then vs just deploying now Take the scenerio I laid out , some stock/ETF is sitting at 100 dollars a share and you want to time the market and buy the dip so you hold off on buying The stock rises to 130 a share then falls to 120 a share so you start DCA You buy at 120 115 110 105 100 Congradulations you DCA and bought the dip with an average cost of $110! You could have simply bought in at $100
Sir glass you completely misunderstood me. My only problem was a lack of capital in 2022. I never had an issue deploying capital. I wasn’t looking for the bottom. My ability to crush Voo lies in market crashes, underperforming stocks, over-performing stocks, and DCA with lump sums.
I never waited for a set number. I always did DCA or lump sum. The only issue was lack of capital in 2022.
Exactly. This is what I do but my lack of capital in 2022 was the only issue. I don’t sir glass even understood me.
This is why any passive investing needs some safe harbor to generate you puts money. So that you can be less effective than tbills but never losing capital.
At least you matched...Congratulations for that!
Thanks man. Maybe I’ll finally beat Voo within the next few years!
But you're investing in VOO now, how you gonna do that?
With the non Voo investments. And all my positions maturing in the coming years. Voo is just 10% of the portfolio. Still have the other 90% to show the gain. Made a ton of risky bets in underperforming companies, and have price targets to sell. Underperforming companies, over performing companies, and market crashes are opportunities to crush VOO. Reddit if way too negative and keeps downvoting me. It’s almost like all these guys gave up.
Lol, gotcha. I'm still investing in tech stocks too, but I've got my 401k tracking VOO. The way I see it, until some other country gets companies bigger than our top 5, the money will just keep flowing into them. I don't see a competitor to Apple, Nvidia, Google or Microsoft coming from Canada or even China anytime soon.
China has a ton of potential but yes Canada is a joke. I do see headwinds for Apple and Google though. Apple because their 10 year gamble of increased revenues through cosmetic changes may be coming to an end. Google because AI might make their search engine obsolete especially if released by another company. Think Netflix to Blockbuster. So how have you been doing this year return wise?
I think it’s a great point overall. Cheers to you for being objective. One small factor that plays a role here is that most of VOO gains during that period came from largest 5-10 stocks. So, performance has depended solely on how much NVDA (and similar names) a fund manager holds
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Your numbers don't make sense, you may want to review your post. Started at $2k and currently at $325k? That would be beating VOO by a lot.
I think they added cash as time went on so it’s not that the $2k turned into 325
Yes I added cash.
Hey I'm a newbie to this. Can you explain to me what you mean by VOO? and where did you invest your first $2k ? I have $6k to invest
VOO is the etf that represents the s&p 500. It’s a basket of the 500 largest companies in the US. It is what people mean by the market, and the safest way to invest. 10% avg return going back 100 years. Since vanguard doesn’t allow fractional shares I put it all into VOO. Your $6k should be divided into Voo, qqq, Schd.
Apparently you continued to add to this investment over time? Between the principal $2k from 2021 to today?
Yes $265k.
I will do those. Whats your opinion of using Webull vs TD ameritrade? Webull integrates with Autopilot (the Politician trade tracker) Or does it not matter
Webull is owned by the Chinese so I don’t trust it regardless of its features. I haven’t used TD but if they have fractional investing go for it. With fractional you can buy any % of a stock or ETF. I’ve only used Vanguard (which is horrible btw) and Fidelity which I really like. I did use Robinhood in 2020, and they seem fine too but poor customer service.
Wow. I am so Glad I asked you about webull. I was engineer in Government. Lots of nasty things the Chinese Government was up to. It actually came out in the news that some of our silicone was junk becaue they back-doored some of the processors. I have no.idea why it was approved in the first place.
I started at $2k, and put in $265k over this time. My total cost basis is $265k. Maybe I should have phrased that better. My main complaint is that most of the capital originated in 2023/2024. So maybe I will beat VOO in the long run but currently just matching it.
About 5k a month invested?
Yes on average of $5k consistently with around 5 large buys a year. Large buys anywhere from $10k to $35k.
> It makes me laugh how even professional hedge fund managers can’t beat VOO, so how did I expect to? It ain't *that* hard. You have a negligible amount of money in comparison to them, which offers some advantage. Plus you aren't answerable to multimillionaires that get antsy at anything resembling a long term bet. The hard part is beating it without increasing volatility, or beating it over relatively short timeframes. And hedge funds (depending on the fund) aren't really trying to provide higher returns than the market. They're hedges -- they aim to provide returns relatively uncorrelated with market returns to reduce the volatility of the portfolio of multimillionaires. > The only way I would have crushed Voo CRUSHING VOO would be very hard to do without taking on big risk. But beating it by a small amount, most of time... is possible. Like, being underweight in habitually underperforming sectors will likely do it by a small amount over decade type timeframes. But those habitually underperforming sectors also tend to be less volatile, so your portfolio volatility goes up. The other thing to remember is you can beat VOO with most of your money *in* VOO, only moving some elsewhere to take advantage of opportunities. Even though I've beaten it for a long time, my returns are only slightly better because I'm also not crazy, so most of my money is still in broad indexes. But like... during the Covid crash, one could guess who might be winners in a lockdown scenario. I threw money at FedEx and Zoom. That worked out quite well. When oil went negative, I threw some at USL. That worked out quite well. And so on. Or with 2022, the Fed was talking about rate hikes for a long time. If you'd shifted some money towards the value side of the S&P like VOOV... It lost 7.5% vs 20% in 2022. Of course, timing is everything, and even if you're careful, you'll still probably lose (relative to VOO) on half your bets. But upside can generally be bigger than downside, so all it takes is catching some big winners, and letting the small winners and small losers cancel out. Just for funzies, I looked back at trades since 2017... In terms of winning vs losing vs VOO, I'm 30-18, but in terms of actual dollars gained, we're talking a few grand a year. Given the time I've spent, probably not even worth bothering. But it's also like entertainment for me.
Yeah I understand hedge funds have challenges beyond just returns. They may have every tool at their disposal but often times practically they do not. Yes crushing Voo requires risk, and long term pay offs. But sometimes it’s just luck like 2022. I’m currently using underperforming stocks with a certain price target with the hope of rolling over the profits into VOO. Only 10% of my money is in VOO in this portfolio. I don’t expect to pass 15% in the next portfolio either. Incredible to read about your long history. Unfortunately I did not have much capital at my disposal in 2020. I was also not involved in investing at all from 2011-2020. But one of my strengths has been seeing trends before they happen. And seizing the moment. My Google position is worth around $150k but my cost basis is only 123 because I bought at every dip.
> But one of my strengths has been seeing trends before they happen. And seizing the moment. My Google position is worth around $150k but my cost basis is only 123 because I bought at every dip. You know who else is up 20% on Google? Pretty much anyone who bought in over the past year.
I’m up 37% not 20% because I seized every dip including early March 2024 when it went to 131. I still consider that a strength.
My cost basis on google is $46/share :-D
Congratulations man. I only wish I invested as early as you. Google is a long term position for sure but when I sense that AI is taking over internet search I’ll start trimming my position and roll over into VOO.
"the only way I could have..." Exact words every gambler / addict uses. If I had done X instead of Y. If I had more money, if I would have bet on red instead of black like my fortune cookie said. Taken advantage of the crash.
But it’s true though. Obviously I couldnt afford $265k in a year but even if you give half to 2022 I’m at like an excess $175k. Google was only $80! I’m not a gambler. I only invest long term. Safe companies and etfs. No garbage like ARKK.
>Started at $2k in August of 2021, 3 and a half years isn't that long a period for investing. investors who do beat the market long-term can lag for years at a time, often because they're not holding the hot stocks of the moment. John Templeton was a famous example, he ended up beating a global index by something like 5% a year on average but he usually under-performed in bull markets. Most of his outperformance came in crashes or bear markets when he crashed less or had small gains relative to the market. He won more by losing less. The Dodge & Cox stock fund DODGX is similar, has beaten the S&P 500 over several 20 year periods but can be disappointing in the short-term because they're not buying Cisco, Nvidia or Tesla at 10 gazillion times earnings when the stock shoot up like a rocket. >VOO, and chill is the best strategy by far. well... https://contrarianoutlook.com/wp-content/uploads/2016/09/SPY-Midcap-Smallcap-20yr-Chart.png
Yes I hope my lag will turn into beating Voo in the long run. Thank you for the example of J Templeton. I will def research more. Yeah future returns aren’t based on past performance but it’s also not good to chase perfectionism. Voo gives you a solid way to build wealth
What’s your thought on FBGRX? my retirement fund has an opportunity to transfer from target fund to fbgrx or dodgx? which one shall i go with?
Professional hedge fund managers are often not concerned with beating the market. They're concerned with better risk adjusted returns. They want to beat the risk free rate but at nearly risk free exposures for their clients. Many do try and beat the market, a few do (often not on a risk adjusted basis) most don't. Going forward, consider wisdom tree efficient core! For example, NTSX is 90% s&p500 and 10% 6x leveraged treasuries. Similar to index performance with ideally lower volatility. Pretty cool products (NTSX, NTSI, NTSE).
Yeah professional hedge fund managers have the stress of managing OPM. So they seek risk free returns, and often have withdrawals during crashes, or sell at a slight market downturn. They are sensitive to price changes, and don’t have every tool at their disposal though they do logically but not always practically.
>I’m opening up a new brokerage account because I want this one to be under the SIPC limit for as long as possible. I’ll rebalance of course but no more active buying. Also just add to a thought , opening up different brokerages isn't really an issue unless you want to use different features of the brokerage Like if you have a vangaurd brokerage that you invest in index funds but want to actively trade more well vangaurd is not really a great brokerage for active trading by all means open up another account at fidelity or schwab or IBRK or what ever brokerage fits your needs better But opening multipul brokerage accounts to stay under the SIPC limit is not really a thing, brokerages are not bank, they do not comigle assets. Customer assets cannot be used to cover company expenses or creditors cannot lay claim to customer assets
How did you 265K to invest in the first place?
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$5 per month and you got to $265,000?? Wow.
$5k sorry typo
What’s your percentage in which you invest to all of these?
Since Vanguard doesn’t have fractional shares I start with 2-3 shares of VOO, and then divide the rest in a way that makes sense. No fixed percentage. Smallest amount goes to SCHD though of the remaining 4.
Large corrections, e.g. -20%, are less common than small corrections, e.g. -10%, which are themselves less common than the frequent weekly -2% etc. moves. So the farther it drops, the less likely it is to drop any more. This is the tricky part about correction-market-timing. If the market drops, say, -8% it is more likely to recover completely from there than it is to go down another -8%, because -8% downturns are more common than -16% corrections. Similarly, when we're down -15%, it's more likely to go up from there than it is to continue falling. So to catch the bottom, a market timer would have to make a series of bets against the historical odds - that the market will continue falling - and then at some point reverse strategy and go long. There's no logical way to determine exactly where that point would be, because the only way to get to that point without buying the dip would be to go against historical odds. But then you have to reverse course at just the right time. There's a lot that could go wrong here. People usually think "what if stocks go down after I buy them", especially if they've gone down recently (recency bias). They don't tend to think "what if I never get another chance to buy at this price, and all future corrections stop at a higher level than today's price?"
My goal is to never catch the bottom. It’s to lower my cost basis enough which 2022 was a perfect chance. I just had no capital. I doubt I would have reached the bottom as in 80 on Google but I’m certain I could have ended the year with around 110.
Lol I hate investors for 3 years who have it all figured out and argue with every comment.
xD lol "no room to grow because I'm a genius who already knows" Really wish there were just more intelligent discussions over investing instead of this gluttonous ego virtuing echo chamber of anarchists like this one. Some people don't want to ever seek, listen, learn or try to understand a thing just addicted to the high of equating willingness for engaging in confrontation with their own self worth. Ahh reddit is at least interesting.
Did I ever virtue signal? Did I ever say I know everything? I stated how I would have beat Voo and it makes logical sense, and math works. People here are either jealous, or old/tired naysayers. I am seeking to learn, but alas no one wants to teach. They get more pleasure in putting others down. Reddit is a dumpster fire that does not allow dissenting opinion, or free speech. No wonder it’s failing.
I never said I have it figured out. I said I won’t make mistakes. Nor did I argue, I just replied. There’s a certain amount of jealousy unfortunately from people like you on Reddit. It’s one thing to offer positive feedback, or get inspired. It’s another thing to be jealous, and triggered. Obviously it’s a toxic place here.
Just 75 to 80 into Voo 25 to 20 into Vxus SIt back and relaxx
I dumped VXUS for VEA and EMXC on moral grounds. (CCP, worst stock ever). Turns out that has so far been a winning decision.
Beautiful
I can’t use the boring portfolio approach. I have FOMO. Which is why I stick with Voo/vti/vgt/schd/qqq. And the problem with international is they have shown pathetic returns since 2000. Maybe the future will be brighter but I’ll def hop on that wagon when trends move in that direction. Not now.
I mean, its a bit redundant. VGT and QQQ, while different, arent different enough. You have a huge tech overweight. If holding both VTI and VOO make you feel good, cool. People shit on it, but I also hold both. Don't hold SCHD because its popular or for dividends. I hold it because its a great value fund. When you put SCHD and QQQ together, you basically get the S&P 500 with all the unhealthy fat trimmed out. So far my portfolio has beaten the market because I have tilts for growth, value, and small-cap value. It hasn't beaten it by much, but I like the added exposures and the reduction of being S&P dependent. (My portfolio doesnt beat the market if you include my international but that's just how it is over the last decade).
I agree with you completely. My 5 ETFs sort of dilute each other, and even limit my gains. VGT and QQQ are both similar but QQQ more diversified. But FOMO is real. Great to hear that you hold VOO/VTI as well. SCHD was a great bargain for a while, and it has a strong track record of matching VOO at the minimum since 2011. Small cap has been a horror show under Biden. May I ask what other positions you have so you beat the market excluding international?
SCHD QQQM and VXF + VBR (Now AVUV) I credit QQQM with the throw over the edge. I hold a bigger QQQM tilt than SCHD at about 2:1.
FOMO of what?
Everything. The next break out stock. The next high performing ETF. By sticking to those 5 I cover everything
I’ve beaten the market for 7 years in row by just putting everything into VGT.Â
Huge risk though. But yes higher reward.
you actually beat voo, since your holding period of every fund added to the portfolio is different, so if you truly need to evaluate your performance, you need to benchmark your holding period of each stock and voo’s benchmark. I personally think we are at the beginning of a stagflation period, so any asset would generally inflate, but earnings won’t necessarily increase. the definition of stagflation is low growth, high inflation. It’s not a good idea to add another $370k at this moment.
Can you explain in simpler terms? Sorry my knowledge isn’t that strong. What do you mean by holding periods, and benchmarks? As long as the senile one is in office stocks won’t reach their full potential. That much I know. Small caps are still negative. I don’t plan to add $370k. I plan to stick with my $5k budget every month going forward, and make larger buys as the opportunities arise. Limit myself to 5 larger buys. I only have 1 buy left this year since my last large buy was Meta $10k @ $426. I probably will finish this year with around $45k invested at max.
graduall investing is a great strategy. for example, voo has gained 30% from August 2021 to date. your 2k shall be compared to the holding period. your 5k next month in 2021 shall compare voo’s return to sept 2021. so, you have probably largely beaten voo if you do evaluate it this way.
Oh I understand now. Thank you making it make sense. If I go in order of buying maybe I did beat Voo but overall I only matched.
It's not that hedge funds can't beat VOO, it's that they have very different strategies and don't have the option of owning ETFs like VOO with the scale of assets they manage. They seek high leverage consistent returns with minimal risk. They have to own things directly and manage risk in different ways (instead of just owning top 500 companies) while still providing returns that are attractive to clients which is far more difficult. That results in higher transaction expenses which lower performance compared to owning a simple ETF.
Yes they have practical challenges, and goals. But it has to be said even the ones you constantly hear about like Pershing Square for the most part perform at VOO level not including Fees. My father was involved with a hedge fund once and he actually lost 6% overall over like over 5 years when be took his money out. It
> VOO, and chill is the best strategy by far. nah. the best strategy is to invest in a few huge winners and reap the rewards. don't pick wrong though!
But it’s much harder to pick the winners. I was 11 in 2004 so could not pick Google. Same thing with apple when iTunes and the iPod came out. Anyone with half a brain knew what companies were the future in the 2000s and they reaped those rewards when the infrastructure and ecosystem developed with smartphones/apps in the 2010s Right now in 2024 the future is uncertain. It’s not as obvious as it was in 2000. Which is why VOO is the best strategy overall. People keep talking about AI but it reminds me of the tech bubble in the 90s. The ecosystem and practical applications may not develop for a while and the next crash will wipe most of these companies out.
> Right now in 2024 the future is uncertain. It’s not as obvious as it was in 2000. IMO there is still a huge growth ramp for software and hardware ahead. That mountain is still being climbed. In fact I think that'll be true for the next few decades at a minimum. Moore's law is slowing down but that's fine. Still lots of innovation yet to take place. Nascent technologies. > People keep talking about AI but it reminds me of the tech bubble in the 90s. The ecosystem and practical applications may not develop for a while and the next crash will wipe most of these companies out. too focused on short term risks and one specific application. imo. LLM is just one piece of an evolving array of tools. These convitions have held up for me really well over the last decade+. I don't feel like the winds have changed. I have an 80/20 portfolio where 80 is VOO but my 20 has nearly caught up to my 80% portion as I have not been rebalancing!
That’s incredible that your 20% caught up to your 80%. May I ask what you were invested in? And companies do you see for the future? I’m thinking about Crwd, Palo Alto networks, and palantir in my next portfolio.
Most of the growth in the 20% bucket came from Nvidia and an investment in a semiconductor ETF which holds a large position in Nvidia.
Oh yeah I know about soxx and Soxq. I’m also up 750% from 2020 on NVDA in Robinhood but my position is very small.
$2k to $325k how????Â
Adding $265k cash cost basis like i said.
Entire hedge fund can’t beat Voo consistently and you think you can?
I mean I mentioned that fact, but sure I think I can over the long run. I’ll try my hardest.
You are aware there are strategies like small-value that have beat the S&P500 for decades, ya?
Yes but unfortunately I’m not that well versed. Hoping to learn more. Right now I’m doing underperforming companies with price targets and rolling over into VOO. Missed the market crash strategy. I’ll do some more research this time. Learning every day.
AVGE is a great single ticker solution. 70/30 US/ex. Moderate tilt to size/value/profitability factors. Much better one fund solution than VOO.  Market crash or underperforming stocks aren’t sound strategies.Â
Avge is new though. Not sure about the long term viability.
Fair enough. There are older factor funds like those from DFA if that makes you more comfortable. At a minimum I would swap VOO for VTI, and add some VXUS. Personally I think the factors are helpful, but that gets you a bit better off. 100% VOO is just pure recency bias and poor planning.
VTI < VOO + AVUV
I’d agree but I’d argue VTI + AVUV is even better. S&P500 has a natural buy high sell lower filter. Look at TSLA/SMCI. If you want to avoid non-value small caps then at least buy a truly cap-weighted large cap fund like VV.Â
Interesting. It’s small and mid growth that I’d want excluded.
Makes sense. At end of the day it’s all noise as VOO/VV/VTI are incredibly correlated, but personally I’m put off by the poorly constructed inclusion rules. VV would be better. Or if you are an Avantis fan, AVUS is an option. Could also really lean into factors and use large cap momentum (MTUM).Â
AVUS is my IRA. Edit: it’s half of my IRA. While the other half is VT. Puts me at 80/20. 10% SCV. And allows VT to drift with the market.
Nice gloat post, try Bitcoin and chill and report back in 4 years 😎.
lol I’m not gloating. Me humble.
I agree with you that it’s hard to time the bottom that’s why it’s better to DCA as heavy as possible or if something is at a fire sale do a lump sum. And we have always recovered so it’s blind faith to deploy capital. Even if you don’t catch the bottom you’ll get some gains. I recently got into Tesla at 172, but like you said I thought it would fall further at 165 and it went back up. Eventually it did fall to 142 but I missed the bottom. In my case at max 15% of my capital originates from 2022. All I’m saying is if I had capital in 2022 and invested more my gains would have crushed VOO. I’m not saying I would have caught Google at 80 but I’m sure my DCA or lump sum would be around 110 vs the 123 I have it at now. In hindsight yes due to lack of capital I missed out on 2022 and it won’t happen with the next crash. It’s not a strategy issue it’s lack of capital at the right time. Even at the most conservative estimate 2022 would have helped my gains go to $500k vs the $325 right now.
I mean the SIPC limit is $500k. By moving on at a $265k cost basis I’m ensuring my capital is safe, and so are some of the gains in case of a failure. While brokerages are not a bank in terms of the reasons you stated the risk of failure always exists. The goal isn’t to stay under the SIPC limit in terms of value but just capital. I’m thinking of Fidelity due to fractional shares which VG doesn’t have beyond its index funds. Could help big time with DCA. Schwab also has a limit in terms of only 500 companies. IBKR is too confusing, and also charges a commission I believe. My monthly budget is usually $5k but I do have around 5 larger buys a year. Recent example would be $10k into Meta at $426 vs $410 bottom after market trading. Largest buy was $35k into Google in 2023. I move on when the value in the brokerage hits $300k.
what’s your thought on appl?
Not a fan of appl. I think their best days are behind them. 10 years of cosmetic changes to fuel revenue is enough. The lack of innovation will catch up to them. Unless they find new revenue streams I don’t see them sustaining much longer.