VOO vs. VTI: S&P 500 Index versus Total Stock Market Index Fund
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- Опубліковано 13 чер 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
ABOUT ME
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.
I'm also the author of Retire Before Mom and Dad--The Simple Numbers Behind a Lifetime of Financial Freedom (amzn.to/3by10EE)
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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!
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.
VOO or VTI if you invest in either or you are already ahead of the majority of the people out there
The video was well made, thank you for using your time and energy to educate sir.
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 UA-cam!
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.
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!
Clear and relatable. Thank you!
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.
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.
Learning new information from your videos. Thanks
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!
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.
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.
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.
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.
Great comparison, Rob!
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.
I have VOO, VGT, and VTI because I’m tired of having to pick between one or the other
Best explanation I’ve seen in regards to both funds. Bravo 👏
I'm weird.
My two etf's are VOO and PHO.
Both have been great for me over the past three years.
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 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.
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?
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 .
They are more similar than they are different. Pick one, DCA, and stick to it for the long-haul.
Well explained...I think a lot of people suffer from analysis paralysis
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!
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...
Can you compare why an ETF is better than their mutual fund components?
Rob,
How about in a lump sum buy and hold situation. Would going the ETF route still make sense??
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!
They are essentially the same, but obviously total market is the correct fund.
Lol!
Thank you for sharing. More blessings! 😊🙏
Great video, thank you
Where can I find an example of a 6 fund portfolio? I don't see it in the description.
Hi
Do you think its a good idea to have both in my portfolio or not ?
thanks
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.
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.
great comparison!
I am looking for the 6 fund portfolio link you mentioned in the video? Thx Rob…Great Video!
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
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.
Thanks for the info
Please advise on SPYC it’s IVV with 2% call/put options
I don’t see the link for the 6 fund portfolio you mentioned @15:38. Am I overlooking it?
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.
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.
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.
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.
What are your thoughts on Vanguard ESG?
I just sold a property in Portland and I'm thinking to put the cash in stocks, I know everyone is saying its ripe enough, but Is this a good time to buy stocks? How long until a full recovery? How are other people in the same market raking in over $450k gains with months, I'm really just confused at this point.
I started with VTI! And I will continue investing in VTI! Pick one and go to sleep 😴 📈
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 ?
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?
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?
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 👍✨👍
Very clear and helpful! So glad I discovered this channel. Thank you.
Which fund is agressive fund? I mean which are your top picks? Video idea? You could do also small cap growth vs value
Rob mentions a video where he talks about his 6 fund portfolio (slice and dice)...can anyone find it? Thanks!
Just found your channel , glad I did ! Please keep up the good work ..
Vangaurd VOO is my largest holding.
Awesome Red Sox shirt in the background!!! Love it 😍
Fanway Faithful
Thank you
Thank you so much for sharing.
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 ?
Excellent video
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 😂
Do you feel there is any benefit of having some funds outside of US stock ETFs? Ex. Vanguard's VEA?
VT, EMQQ, KWEB, MCHI
What about the VOOG? Is it better than the VOO?
this is a really good video. thank you sir
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.
Hi Rob, i am a new subscribe to your channel and to me your are spitting out gold and knowledge! thank you for your content!
I have watched your "how to invest cash for short term goals" video however I have a question.
For a young investor like myself saving money for my next investment property and I opened a investment brokerage account planning to invest in ETF funds for the next 2-5 years. Should i go with a 3 fund portfolio or a 6 fund portfolio, if i want to invest aggressively?
What if we invest in both? Is that a bad strategy than investing in just 1?
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.
What about adding the s&p and extended market?
Does that change the calculation?
Great video
Crees que estaría bien invertir en ambos? O solamente en 1 gracias
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.
Thank you sir:)
Love this video! Always excited when I see you have posted something new!!
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).
I just ended up going with both of them. Just put a little in each pay.
I started so late but I’m excited about it
I use them both. I trade one for the other when TLH
Good vid. Can we get a VTI vs. SCHB? They both look identical to me, but I may be missing something.
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
Nice Analysis
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
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.
Recommend and REIT ETFs?
Great video. Is there any pros or cons to owning both?>
Newb question here. I often hear people say things like you said about monthly investing. Things like “if you invest $500 a month”…. Well unless I’m mistaken, speaking for VOO you can’t invest $500 a month because fractional shares are not available correct? As of today you could only invest $433 a month an buy yourself 1 share.
Right?
Some brokers allow fractional shares. And you could always use the mutual fund version--VFIAX