VOO vs. VTI: S&P 500 Index versus Total Stock Market Index Fund
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- čas přidán 28. 06. 2024
- VOO vs. VTI--S&P 500 Index versus Total Stock Market Index Fund⛱ [ATF Text]: [ATF URL] Click "Show More" to see Ad Disclosure
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0:00 Introduction
1:20 VOO vs VTI
8:40 S&P 500 vs Total Stock Market Returns
13:43 How to Choose
I've been investing for over 30 years and writing about investing for the past over 15 years. One of the questions I get quite a lot is in a portfolio, should you invest in an s&p 500 index fund, or a total stock market index fund? And it's a good question. And it's one that sort of torments folks. I don't think it needs to; actually I think the answer is really, really simple. But the explanation takes a little time. We're going to walk through that today. And what we're going to do is we're going to compare two Vanguard ETFs, we're gonna first compare the s&p 500 index ETF, which is ticker VOO. And then the vanguard ETF that covers the total US stock market, and that's ticker VTI.
They're good representations of the two markets that they cover. And it's interesting, because what we're going to learn is there are a lot of significant differences between the two funds, the two types of investment strategies, s&p 500 versus total stock market.
#voo #vti #investing
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While still working as a trial attorney in the securities field, I started writing about personal finance and investing In 2007. In 2013 I started the Doughroller Money Podcast, which has been downloaded millions of times. Today I'm the Deputy Editor of Forbes Advisor, managing a growing team of editors and writers that produce content to help readers make the most of their money.
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Thank you, Rob. The important lesson: Do not dicker and dally about which broad-based index fund to choose………begin investing as soon as possible. Time is your tail-wind. Don’t squander it!
Wall Street pitched so-called quality stocks with high profitability and low debt, as a kind of insurance against whatever the economy might throw at you. Quality stocks have underperformed the S&P500 this year, waiting may not be the best decision for investors. It might sound basic or generic, but getting in touch with a financial adviser was how I was able to outperform the market and raise a profit of $350,000 since Jan 2022. For me, its the most ideal way to jump into the fin-market these days.
It’s precisely at times like these that investors need to be on guard against the next certainty. You don’t have to act on every forecast, hence i will also suggest investors to get yourself a financial-advisor that can provide you with entry and exit points on the shares/ETF you focus on.
@@davidjackson4437 My Financial Advisor is CLAUDIA TRINIDAD RIVAS I found her on a CNBC interview where she was featured and reached out to her afterwards. She has since provide entry and exit points on the securities I focus on. You can run a quick online research with her name if you care for supervision. I basically follow her market moves and haven’t regretted doing so...
It is better to have time in the market than trying to time the market and pick the perfect stock… VTI vs. VOO, just invest and stop wasting time!!!
💯
Factz
I agree. Some people get all uppity and proclaim "THERE'S SO MUCH OVERLAP BETWEEN THE FUND!" as if having 2 very similar funds contaminate each other.
This is very timely for me. I was pondering this question this morning for my Roth IRA. Thank you for such a clear explanation.
The video was well made, thank you for using your time and energy to educate sir.
VOO or VTI if you invest in either or you are already ahead of the majority of the people out there
This is the explanation I needed now that I'm learning about passive investing.
THANK YOU ROB! At last I got the nice and easy-to-understand explanation of these two ETFs.
One of the best finance channels on CZcams!
I personally like that you can compare the returns of an S&P500 index fund to the actual S&P500 index more easily over any time frame. It gives me that extra bit of confidence that the fund is investing in what it says it is, and returning the market rate it should.
I'm weird.
My two etf's are VOO and PHO.
Both have been great for me over the past three years.
Great moves my friend! I’m not big on dividend investing as my stock investing is mostly long term index/ETF and last year I made about $60k in appreciation so that’s exciting!
Thanks for the videos. You said you would link to the 6-fund portfolio, but you did not. Would like to watch that one. You are a smart fellow, Abe.
Great video. What I’ve come to believe is it’s better to invest as much money as possible as soon as possible, rather than agonize over the perfect fund. Maybe buy 3-5 funds and just keep investing!
You can always pick an s&p 500 etf and a russell 2000 etf and you yourself decided which one you want to put more of a percentage into.
Rob, I have recently found you and love the few video's I have viewed. I am probably the minority and own a little of both. I know it's crazy!!! Thanks and keep the great content coming.
Thank you for this clear explanation and concluding remarks. We are trying to decide now exactly which funds to settle into for retirement. This was very helpful.
I put $300 into my Brokerage account a month. Being that VTI is just under that amount makes things very easy for me. I've been buying VOO. It's nice to know they're not that much different.
Best explanation I’ve seen in regards to both funds. Bravo 👏
They are more similar than they are different. Pick one, DCA, and stick to it for the long-haul.
Hi Rob, thanks for this explanation. Would you please leave a link to your 6-fund portfolio? Thanks
Amazing comparison and general investment tips. Keep it coming!
Learning new information from your videos. Thanks
Looks like VTI can slightly outperform/underperform due to the inclusion of micro/small/mid caps. I prefer it
minimal exposure at best. Voo at 90% portfolio + 10% voog will outperform your vti long term guaranteed. Normally, i wouldn't guarantee investments. But that one I would. There's some good articles on it. Check it out.
also you're probably smart, but incase i had to explain. The exposure is minimal because it was market cap weighted not risk or performance rated like my example :) This is why buying like voo is like putting x% directly into apple or fb, msft, apple, etc. u know. yup.
Really helpful, Rob. I just divide up the equity portion of my portfolio 50/50 between FXAIX (s&p 500 index) and FSKAX (total U.S. stock mkt). Everyone's different; for me, having a little more exposure to mid and small caps than an s&p 500-only portfolio feels right.
Hey Rob, great video as always. I just want to add that some 401ks offer extended market funds which allow us to add the small and medium cap companies to the sp500 fund. You can explain how it works better than I though.
Well explained...I think a lot of people suffer from analysis paralysis
Clear and relatable. Thank you!
I really like your advice…..any thoughts on NULG and SPLG…..using a s&p 500 fund of different sizes as with splg vs voo…….just 10 times the amount of “shares”…….how do you feel about that? Thank you
Good video but... You forgot to link the 6 fund portfolio as mentioned and in your 6 fund portfolio on M1 finance you use VTI which is contrary to what was stated near the end of this video. Not trying to make waves, just trying to understand.
I appreciate this video! I was losing my mind trying to decide which one to choose.
Personally I would go with the S&P 500 Index fund. It's slightly less volatile than the Total market
I just went with both instead of stressing over it.
Can you compare why an ETF is better than their mutual fund components?
I have VOO, VGT, and VTI because I’m tired of having to pick between one or the other
They are essentially the same, but obviously total market is the correct fund.
Lol!
Thank you so much for such a well explanation 🙏🙏🙏🙏
I am not sure what is 3 fund or 6 fund , but I will investigate further .
Hi Rob, why is it that when you run a Monte Carlo sim, using Portfolio visualizer for VTI and VOO, you get significantly different results. Same happens when you run VTSAX and FSKAX?
Mr Berger you should do a video about exchanging mutual fund to index funds. I had a lifestradigy fund and was transferring to index funds to save money. I wanted to start the year off by saving on expenses so I sold the day of dividend distribution and lost thousands by selling on that day. You would be great to explain this action. Remind investors of dividends and distributions.
Great comparison, Rob!
Rob,
How about in a lump sum buy and hold situation. Would going the ETF route still make sense??
Vangaurd VOO is my largest holding.
Please advise on SPYC it’s IVV with 2% call/put options
Started investing in the stock market primarily in VTI at the age of 33 and now, VXUS, and boy, I can't wait to teach my children about the importance of investing earlier than I did. My speculative ETF is ARK and SLYV that make up 10%.
How is your VXUS investment going? It looks like it has a lot of room for growth, I'm intrigued. Btw I'm twenty, got into crypto at 19, and now I'm planning to get into stocks so I appreciate the second tip. I was planning to only invest in VTI, but you've opened my eyes towards international funds
@@yasserkool
It's a pretty boring stock without much growth with no volatility at this point. I hold it to hedge against the US markets if the markets take a massive dump. International markets certainly have a lot of room to grow. I feel its important to have exposure to international markets without stock picking, although US companies have global reach.
@@ebear4015 I agree, well I'll definitely pick up VXUS as well. I know a lot of countries that are aiming for more growth in the next decades, im just not sure how much % I should invest in it, I'm thinking 70% VTI and 30% VXUS.
33 leaves you with lots of time to let things simmer. Better 33 than never, like many….
@@yasserkool VT (Vanguard Total World Stock ETF) is about 40% global exUS and then 60% US total market and many people like VT as a all in one single position holding for a portfolio. Something to think about. I'm much lighter on foreign though.
Have you done a similar analysis of Cap-weighted versus Equal-weighted S&P 500 (or other comparable) funds?
No, but that's a good idea. I'll add it to my list of topics for future videos.
New to the channel and liked the video, thanks a lot. I like your 6 fund portfolio idea - where can I learn more about it? Also, do you have mid and small cap funds you like? Cheers.
Where can I find an example of a 6 fund portfolio? I don't see it in the description.
I just ended up going with both of them. Just put a little in each pay.
What about the VOOG? Is it better than the VOO?
What are your thoughts on Vanguard ESG?
Hi Rob, thx for info! I’ve noticed ppl don’t talk about Vanguard’s VLCAX index fund or VV- etf version. I think VLCAX/VV is more like VFIAX/VOO than VTSAX/VTI. What do u think?🤔
VV takes out the growth stocks and only invests in value companies that are proving earnings
Hi
Do you think its a good idea to have both in my portfolio or not ?
thanks
Which fund is agressive fund? I mean which are your top picks? Video idea? You could do also small cap growth vs value
After some research and basically all things equal, I went with VTI due to its price point which allowed for consistency through the years.
Rob- just beginning my investing journey and I'm trying to improve my financial literacy. I was wondering if you had any content regarding building tax-efficient portfolios in a taxable account? Thanks in advance and thank you for all of your informative content.
Just hold anything you purchase for 1 year and you'll pay less in taxes on any gains.. though the US GOV is trying to change this so there is no benefit of holding for 1 year.
Look for municipal bond fund, their dividends are exempt from federal and state income tax
@@Kyungone i thought in California ca municipal bonds are only exempt from state taxes . Taxable to federal. I have ca municipals .. have I been doing my taxes this wrong?
@@donnafong2267 (;((((
@@donnafong2267 municipal bond interest is not taxable by the Fed, generally speaking.
Hi Rob - along these lines, I have been comparing VFIAX to VOO, since I own a large position in VFIAX but it costs an additional basis point in fees over VOO. On a large holding, this difference adds up to real money over time. One would think that the only difference in performance would be attributable to the difference in management fee. Yet, when I compare the two in Portfolio Visualizer, it appears that the Admiral Shares actually out-perform VOO. Do you know why that might be, assuming the data is correct?
Thank you!
I use them both. I trade one for the other when TLH
Very clear and helpful! So glad I discovered this channel. Thank you.
I am looking for the 6 fund portfolio link you mentioned in the video? Thx Rob…Great Video!
I like both of these, but would VOO be a better bet if reinvesting dividends? It seems VOO has provided a slightly higher dividend versus VTI. I wonder if reinvesting those dividends over the long term would make VOO a better fund to go with
Vanguard S&P 500 ETF (VOO) --- Vanguard 500 Index Fund Admiral Shares (VFIAX)
Vanguard Total Stock Market ETF (VTI) --- Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX)
One is subset of the other. The latter hold small caps thus more diversified. They are almost interchangeable and their 5 year 10 year and Since Inception returns very similar: (VFIAX) = 8% VTSAX = 8.5%. Pick one and invest as much as your income and budget allows.
basically VOO is inside VTI, so with VTI you get all of VOO (same holdings) - I agree with your reasons for one over the other - I like having something like VBR with VOO - and since small caps have greatly outperformed this year, it's nice to be heavier weighted in small caps... but the larger ones are there for downside protection... no free lunch... Equities are easy to balance like that - it's bond investing that keeps me up at night lol.. Funny how it was always the other way around for years... Fed is keeping us all on our toes lately... Now if I could only go back in time and buy VTI again for more shares at $98!
Currently VBR is up 6 or so percent over the past 6 or so months….VOO is up double that. Any chance you think that will change over the next 6 months?
@@kyaghleah well they track two different indexes - the VOO is the S&P 500 basically - and the VBR is more the russell 2000 which are more value stocks, which were doing great. VOO is a longer term investment in my opinion, but I hold VBR and bought it a while ago, and it has done well too. - they can change daily too, and some quarters, one is doing better than the other. - BTW as I posted, I prefer VTI over VOO - they are very similar, but VTI gives a slightly larger exposure to more things... I hold VTI and VBR and you could add a couple of Bond funds and a decent REIT and maybe Gold and have everything you'd need forever...
@@mediacreationsusa thanks!! Another question: The BONDS ETFS look as if they haven’t grown at all in the past 5 years. Why would I invest in them? A hedge?
@@kyaghleah You want a percentage of bonds based on your time to retirement - 60/40 Equities to Bonds was always a good rule. im more 50/50 now but I'm getting older - normally investors would have Short term and long term bond funds - or take the middle road in something like BND is a pretty good ETF for bonds... I actually like VCLT better as it has a better yield, and still not a huge risk being mostly corp bonds... but the idea is that short term pays better, and long term was always supposed to be less risk. Actually, I look at bonds as part of a good fixed income portfolio, along with other things, which is where you would be headed closer to retirement, and you need a monthly or quarterly payout to pay your bills. Meanwhile, you can re-invest those dividends until you need them to pay you. I would look into some of the Pimco funds... but do your DD - don't listen to ANYONE on youtube alone - better you understand how things work like that - CEF are great to have too with bonds, but watch those fees!
@@mediacreationsusa 👍✨👍
Great video, what’s your opinion of the vanguard total international stock market? Is worth to have it in the portfolio?
Vea developed markets vwo emerging markets are Better pics invest in both equally . 12.5% each if your brave lol 😂
Thank you so much for this. Off topic, is there an advantage to choosing the "Admiral" versions of these index funds?
Yes, the admiral is so to say the "rich persons " version, so if you have 10000 dollars then you can buy the admiral shares and have lower fees. I dont remember the exact numbers but I think VTI had lets say 0,13% fees and admiral shares 0,027% fees.
I don’t see the link for the 6 fund portfolio you mentioned @15:38. Am I overlooking it?
Great video, thank you
Thank you for sharing. More blessings! 😊🙏
Do you feel there is any benefit of having some funds outside of US stock ETFs? Ex. Vanguard's VEA?
VT, EMQQ, KWEB, MCHI
Recommend and REIT ETFs?
Rob mentions a video where he talks about his 6 fund portfolio (slice and dice)...can anyone find it? Thanks!
Great video. Lower dividend ETF VTI would be better in a taxable account.
Like in a Roth? Why?
@@KoodGarma - a Roth is a tax sheltered account, not taxable account (brokerage).
Where is the link to the 6 fund portfolio ? In your article - How to Invest a Million - you have the VTI and not the VTO.
New subscriber here. Did you mention whether dividends are being rolled back into the investment, or simply cashed in?
You decide to re-invest or cash it out. I reinvest.
I wish you would have identified how much small cap/small cap value is included in the VTI.
About 2.5 %. That’s why it tracks VOO so closely since almost 90% is the 500
Love this video! Always excited when I see you have posted something new!!
What about VT vs VTI? VT has an inferior record to VTI but is it a good idea to put all chips into the US basket for the long run?
I use VTI, VXUS for international exposure and BND for the bond market. Just adjust your allocations as you get older.
Today when I look at the holdings on Vanguard's site, they are in a different order between the two ETFs.
Odd... They are both market cap weighted. Probably just a moment in time thing that will correct itself soon. I wouldn't make any decisions based on that.
If you read the little book of common Sense investing you'll see how the creator of voo & vti which is John Bogle stated that they are basically the same regardless of which you pick the return difference are minute
Thanks for the info
Thank you so much for sharing.
What if we invest in both? Is that a bad strategy than investing in just 1?
great comparison!
저는 대한민국에서 살면서 미국주식을 투자하고 있습니다. 존 보글을 존경해서 뱅가드의 ETF를 선택 했습니다. 제 선택은 VOO 였습니다. 티커가 VOO가 VTI보다 더 귀엽죠! 좋은 영상 감사합니다.
I'm live in Republic of Korea(South Korea) and invest U.S Stock. I chose Vanguard ETF out of respect John Bogle. My choice was VOO. VOO is cuter than VTI ticker! Thanks to nice video.
로마 숫자로 V가 5를 의미하고 OO 가 00을 의미해서 500을 의미하기도 합니다. 알고보니 더 특이하죠 😀
Cute Investing is my favorite investing!
Love this video, thank. I m investing in VTI makes feel good knowing I own all the stocks. Question do other total stock market own all the stocks like VTSAX. For example total stock market from fidelity owns all stocks too ?
I have both. VOO is doing slightly better then VTI . VOO is at 4.96% right now but to be fair I have been selling off some shares in differing amounts so it's hard to say. I know it is best to keep it in for the long run but monthly expenses force me to sell some shares now and again. I got into the market when we came into some money and thought it best to invest rather then CD's or a savings account. I've beat the Dow since 2011 except for one year. 2015 I was actually at minus -0,38% I forget why. Best year was 2020 at 48.05% plus
Thanks Rob for the detailed info on VOO vs VTI. Can we also please see a comparison on VOO vs VYM? I saw your other video on dividend investment, would love to see your take on how these two stack up in long term.
VOO is the S&P 50O. Vym is a value large cap fund.
VOO has done much better. I replaced my VYM with SCHD.
If you are a newer investor, just keep adding to VOO. This fund has both growth and value in it.
You can’t go wrong with the S&P.. Just ask warren Buffet.
@@bkozulla5841 I have VTI and SCHD. Not sure I would pick up VOO since I already have VTI.
@@bkozulla5841 assuming this nation still has greatness left in the tank
Just found your channel , glad I did ! Please keep up the good work ..
This is how I made my 6 figures in passive income last year! Love me some compound interest. Just set it and sit back 💰💰🙌
Where have you been all my life? 😅 I wish I found this channel sooner. Thank you for sharing your knowledge with us. It’s very valuable.
How you haven’t heard of Google until now is more concerning
Hi Bob, I live in Australia and am late to investing. Over a 5 to 10 year period should I invest in growth stocks or an index fund?
Is there a mistake ? The US Stock market which you chose as portfolio 1 doesn’t show the global Stockmarket. That’s why I think there is not a big difference. Am I Wrong?
Was there a discussion about taxable vs non-taxable accounts. I have been reading that ETF's are better for taxable accounts because they have less disbursements. I was hoping that was going to be discussed here.
Thank you sir:)
Excellent video
Thank you
I invested in both VOO and VTI
Hey Rob , why do seem to favor Vanguard over Fidelitys S&P fund when the Fidelity fund is much less expenvice on manage cost for the fund ?
Nice work! currently VBR is up 6 or so percent over the past 6 or so months….VOO is up double that. Any chance you think that will change over the next 6 months? P.S. It seems like big tech and financial stocks make for a good barbell approach. Do you agree?
Absolutely no idea what any investment will do tomorrow, next month or next year. As for the barbell approach, I've noticed the exact same thing with my Apple stock and two bank stocks.
Nice Analysis
Rob, excellent video. - - - If you haven't done so already, I'd like to hear what you would recommend to a senior citizen who can't invest for the long term?
What do you do if someone steals your retirement annuity?
Go over expense fee?
Good vid. Can we get a VTI vs. SCHB? They both look identical to me, but I may be missing something.