New subscriber here! I’m glad I found this channel. Good information and easy to understand. I’m new to investing, and late to the party 😢 (52 years old) but very motivated, a month ago I started my first portfolio: VOO/VGT+QQQM - thinking about adding some SCHD. Thank you for posting and keep up the good work!!!
Hey Ron. I'm glad you found the channel and more importantly got into investing! You certainly started off your portfolio the right way! Great holdings. I think mixing in SCHD is a great move. You could slowly add it over time as you have new money to put into the market if you don't want to move things around at the moment.
Thanks for the video! All these funds are great in a diversified portfolio with VOO/VTI at the core. I did stop buying VGT a few years ago (I still hold a large position- not selling) due to the changes in the GICS sectors that took out Tesla, Amazon, Google, Meta, Visa, ADP, etc from VGT and made it a concentrated Apple and MSFT play. I have always liked SMH because it's a global fund which includes ASML and TSM. I also started a position in a cybersecurity ETF WCBR a year ago as this sector should grow in lockstep with AI.
Very nice feedback! You have great reasons for each thing you buy. Love the research and knowledge. After that, it’s a matter of staying the course for a long period of time.
Hi Jeff! I have a $30,000 in a ROTH 401K with a previous employer that I am currently restructuring. I already bought about $10,000 of SCHD shares. I am thinking to buy $10,000 VGT or FTEC (this last one is much cheaper than VGT and it virtually has the same holdings however, less than 10B of AUM). That leaves me with $10,000 that I am thinking to invest in SMH. I want to point out I already have plenty of S&P 500 exposure in my TSP (a government version of the 401K) with 60% invested in the C fund, as well as $40,000 of VTI shares in my Vanguard Brokerage Account. Thanks so much for your highly educational and informative content!
I love that move. Especially because you have a nice chunk of the S&P 500 and VTI already. The VGT and SMH will be rollercoasters. But if you're patient for many years (or even decades) the payoff will likely be nice. It's crazy because VOO is an awesome investment. It is my 'core strategy'. I always hold a chunk of the S&P 500. But my 'other' holdings have outperformed it for EACH of the last 10 years (not just overall, every single year). That mix was primarily SCHD + VGT (even mix). It is wild. Will it continue to happen? No clue. But I have been riding it to great success for many years now. I will adjust as things change. VOO is always my 'if you're not beating it, adjust' radar (:
Thank you so much Jeff for the video! I love all of your videos! They are very helpful. Would you say XLK is better than VGT? I just started investing in VGT this month after watching your videos, but I just watched this video and wondered if I should just invest in the XLK? I would like to know your thoughts and advice. Thank you so much again!
Hey Jane. Thanks for the positive feedback and support, I appreciate it. VGT and XLK are very similar. They are both 100% tech. XLK is 'big tech' only, and it only holds 70 companies. VGT pulls in the same big tech, but also some mid and small cap as well. VGT holds 324 companies. I like VGT, but I think picking either is fine. Here are the long-term returns: Total returns last 10 years: VGT: 563.14% XLK: 550.42% Total returns last 20 years: VGT: 1,590.41% XLK: 1,482.88%
Awesome review...beckons the q what direction do the next 20 yrs be ...odds are tech continues its tear as this sector seemingly has no limit. Everyone's heard of diversification but are we really better off spreading NVDA, APPL MSFT and GOOG's wealth to a bunch of under performing holdings? Why not just buy the winners?
Hey James. I do think tech will continue it's tremendous run moving forward. It is why I am a VGT bull to the fullest. I still like a mix of value with SCHD, and a cornerstone with VOO, because we never know what will happen in the future. I love tech, but so did people before the dot.com crash. I know this time is different than that, but we never see the wall coming until it is too late. Hindsight is always 20/20.
@JeffTeeples I too hold VGT...but NVDA, Apple msft and Google have all out performed vgt...got me thinking why balance ...go with the winners ...greater upside
I wish it was that easy. Often times todays winners are tomorrows losers. Riding the waves can work, but I have found better long-term success with buying the comparative dip by sticking to a balanced target allocations. Usually it’s not popular in the moment, though.
@JeffTeeples I ve been investing since 1987...I get where you're going...just this 'tech bubble'' s ' limit doesn't seem attainable at this pt. I'm on other stuff too...to be' safe' ....👍
Thanks Mike! I'm with you on that one! They are all great, but I like a little more spice (including the highs and lows) with my growth section. I have VOO and SCHD to balance things out a bit when times are tough.
Hey Michael. I'm with you 100% on that. Every investor is at a different place and has different goals. For these videos, I 'assume' long-term buy and hold with no panic selling. It is the only way to cover the masses, but to your point, it will absolutely not work for someone that is in a different spot. For example, a retiree likely won't want to load up on VGT if they don't have the portfolio producing the passive income to get by with a nasty market crash.
I see the point of the foundational ETF (VOO) and growth (QQQm); but why the dividend ETF (SCHD) if investing for the long term; doesn’t this offset the growth ETF; to me if you were going to do this three fund portfolio why not go all in on VOO? I personally am all in on growth and DCA is my strategy; makes things simple and maximizes growth (my objective); I’m mid-30s with a 15-25 year time horizon before living off my holding (flexible, but striving for financial independence in 10-15 years if growth funds grow at their current rates); thoughts? Maybe a video to argue why a dividend ETF is useful given our presumed commonalities of age and investment objectives. Thanks for the useful video! Cements my 50/50 QQQm and XLK split I follow.
Thanks for watching & for the question. I think a 50/50 mix of growth and cornerstone will work great over a long stretch of time as long as there is no selling going on. It's not for everyone, but you will very likely 'beat the market' over the next 20 years that way. Timing the market is what gets people in trouble. I like dividend ETFs (SCHD for me) to raise my floor. I started as a Boglehead, and I think their 3-fund portfolio is solid. Then Warren Buffett got me all in on the S&P 500 as being the best long-term investment as a DCA person. My goal evolved to beating the S&P 500 each year (if I can't, I'll join it). With 50% VGT / 50% SCHD, that has happened each of the past 10 years. In 2022, VGT was down 30%. Brutal year for tech. But I beat the market (VOO) in 2022 with the 50% SCHD carrying the load. I like the balance of 'trying to create a better VOO'. If I can beat the thing most smart people roll with, each year, I'll be a happy man. The compound effect of the outperformance has been well into 6-figures for me. Yeah, it could be WAY more, but I like the floor being raised because we never know when the next big crash is coming. I DCA into my allocations to keep the balance with auto dip buying (buy whatever is the most beat up each week between VOO, VGT, and SCHD).
Thank you for the comment & question. VGT is more universally available than FTEC. It has almost 72 billion of assets under management to FTECs under 10 billion. They do follow the same index, and will give basically identical results. I tend to use & like Vanguard funds for their wide spread availability and consistent low-cost structure. And the founder is one of my favorite investors to follow of all time!
@Jeff, Great content. Thanks for sharing your research. How about this combination for a long-term investment strategy? VOO 25.00%........ SCHD 25.00%........... (XLK or VGT) 25.00%..... QQQM 25.00%
Thank you for watching, for the feedback, and for being a member! Shoutouts coming in Sunday's video! I think that is a fantastic mix of ETFs. It is a bit heavy in growth, but that is okay as long as there is a hard rule NOT to sell when the market crashes. It's more important than ever to dollar cost average more money into the allocations at that point. Zoom out many years and you will very likely be a happy camper.
With expense ratios, the lower the better. Comparing a 0.03% to 0.10% isn’t going to make a large impact over time. 3 basis points will cost $3 per year for every $10,000 you have invested. 10 basis points will cost $10 per year for every $10,000 you have invested. The returns are much more important. However, there is a HUGE difference between .03% and .75%. That will compound to thousands of dollars. Anything 20 basis points (0.20%) and below is great.
Great video Jeff. Do you not feel like you are missing out by not having invested a decent chunk in Meta, Google, Amazon and Tesla? Only QQQ has some small exposure to these (same for VOO)? I believe in being data driven and following the numbers. I know you have a long history with VGT but again XLK has better performance, better CAGR and lower expense ratio. You choose VOO over VTI as it’s more concentrated and you believe bigger companies have the advantage. I would liken VGT to VTI in that it holds many companies which can be a good thing, but can also drag things down. I own more than 700 shares of VGT so like you I am all in, but perhaps the numbers don’t lie. Keep up the good work.
Hey Michael, Thanks for the feedback and questions. You nailed it. VGT is more akin to VTI, and XLK is more like VOO. With 'the market', I like a slightly higher concentration (VOO). With tech, I like to trickle in more small and mid size (VGT). VGT has outperformed XLK by 1% (so basically tied) over the past 20 years. I'm assuming you're referring to performance in past 1-3-5-10 years of XLK. The largest companies have been dominating, and therefore XLK and VOO have been outpacing VTI and VGT. However, VGT and XLK are 82% identical by weight. With a 'tech sector only' set up, I prefer pulling in a few more companies. As of 2014, your feedback would be identical, only in the favor of VGT. 20 years being tied means they have identical CAGRs. I don't know if the next decade will be 'VTI or VOO' dominated. But it's a coinflip. If one was BETTER over 20+ years, I would roll with it. As far as the QQQ/QQQM, I have long considered adding a nice chunk. Not necessarily for the specific companies you mentioned, but for the balance it provides outside of tech in changing markets. It is #1 over the past 20 years. For now, I'll roll with VGT. I usually only make BIG changes like that yearly (assuming nothing crazy happens). I could mix some in in 2025. In the last 3-5-10 years, it has been a VERY good move not having QQQ mixed in with VGT. But I don't know what the next set of years will look like. QQQM won last year.
Great content, excellent presentation! Thank you. If you have not already, can you please make a video of % allocation to cornerstone, value and growth ETFs wrt years from retirement?
Thank you for watching and for the question! I made one a while back that I'll link to this comment. There is no 'perfect' one size fits all, but this should give a basic road map. Thanks! Best ETF Allocation By Age: ua-cam.com/video/mqmpaEOtO6o/v-deo.htmlsi=1BnwVrOERbi0ixD0
Great video - thank you! The 20 year perspective is interesting. I've often wondered if the small and micro cap exposure in ETFs like VGT and FTEC have ever been a factor or if it's just a diversification warm blanket. And I didn't realize SMH only holds 26 companies!
Thank you for the feedback CM! Also, I appreciate you being a member! I'm going to address that a little more in Sunday's video. I'm working on developing a version of portfolio visualizer for conducting back tests in Excel with the holdings we discuss on the channel. This will be a WIP, and will soon be available in the nerdy spreadsheets. I love the website, but I like to be able to throw in more scenarios on the fly. I also want to track my portfolio results year-by-year to show this stuff continues working. If I add, say, QQQM to my mix, I don't want it to change my historical results. Oh yeah, people are extremely high on XLK and I hear how VGT & FTEC are duds by comparison. But then the same people say 'just you wait' about VTI catching VOO again. It's the exact same concept. All 5 are amazing. VOO & XLK have been monsters lately because the bigger companies have been going off.
How can we dollar cost averaging when purchasing shares of an ETF of the prices change throughout the day?? Or you mean we should set it up to automatically purchase say three shares every month regardless of the price for the day thank you
I was wondering what you thought of having 20% in Russell 2000 like VONG Russell 1000 Growth? I currently have QQQ, SCHD & VOO. I love the content that you bring on this channel.
Thanks for the question and comment! I think VONG is a solid ETF. I would like to do a video soon about it along with one about SCHG. I love your current mix. Very solid long-term buy and hold solution! It will be extra juicy when the market crashes (don’t sell! Definitely remain a buyer at that point regardless of the noise around us).
Hey Juan. Thanks for watching and for the question. I think every growth ETF you mentioned is very solid. If you dollar cost average into that mix I bet you'll be a happy camper many years from now. #1 thing is to not sell if the market crashes. Stay the course.
I finally convinced my wife we need to switch her retirement plan at work from he underperforming and expensive target date fund to FXAIX. While an S&P index fund isnt ideal, its the best option available through her work. the change will save us $900/yr in expenses. And THEN rebalance our taxable account to 50% SCHD and 50% aggressive growth, adding FTEC to shares of UBER and MSFT to balance out our overall portfolio.
Amazing work my friend! If you stay the course for many years, your wife will be very happy! My wife actually has her 401k in FXAIX as well. Mine was too before I rolled it over to my rollover IRA. It’s a great fund to cost average into.
I like FTEC. It follows my favorite tech specific underlying index. Will have some ups and downs short term, but I love the play long-term. I’m up over 100% on my FTEC (VGT). Plan to hold for multiple decades, regardless of market conditions.
@@JeffTeeples Thank you for the quick response. I had recently begun an FTEC position in my ROTH IRA and was exploring alternatives just in case there was something I liked better in this sector.
Hey Richard, thanks for the question. I use Seeking Alpha total returns for those figures. I have a link in the description if you're interested in trying Seeking Alpha Premium for free. I don't have one that shows the yearly % in a single snapshot. Although I am putting together a spreadsheet (slowly over time) that does fill in the yearly returns for my favorite growth ETFs. It's still a work in progress. I use portfolio visualizer to make sure my numbers are correct. It's cool because I compare the different CAGRs over stretches of time for the growth ETFs. This will likely be something I share in the future as I slowly fill it out.
Thank you for your question. I'm going to be honest here and let you know I don't know anything about that ETF. Taking a very quick look at the returns, it has drastically underperformed QQQ over the last 3 years: Total Returns: QQQ: 32.53% QQQJ: -11.32% I will say that I don't have an educated opinion on *why* that is the case. The top 10 holdings seem very weird compared to most ETFs I look at.
Im new to investing, and have a question. What is the goal in having growth ETFs in your portfolio? Is it to hold then sell much later? Currently, my portfolio consists of some individual stocks, and SCHD dividend ETF. Thanks
Hey Harrambee. Thanks for the question. You nailed it. There are two primary ways for investors to make money with stocks or ETFs: 1) Price appreciation (growth stocks or ETFs) 2) Dividends (dividend stocks or ETFs) To be clear, many growth companies also pay dividends (such as Apple and Microsoft), so it can get a little gray. To keep it fairly simple, you would buy a dividend ETF, like SCHD, to receive cash flow with a quarterly dividend payment. You also hope for some price appreciation as well. You would buy a growth ETF, like VGT, hoping for the price to increase drastically before you sell it. It pays a small dividend as well, but the primary focus is on the growth of the companies that make up the ETF. Instead of paying you, the owner, a quarterly dividend, they money is reinvested in the company to produce more future profits. Generally speaking, but not always, VGT will have higher 'total returns', which is price appreciation + dividend income, than SCHD over long stretches of time. But, it will also be a rollercoaster. In 2022, for example, VGT had a total return of negative 30%. SCHD was only down 3% in that year. SCHD is much more stable. So generally speaking, younger people with many years left to invest will want more growth ETFs like QQQM and VGT in their portfolio. This is because they will be buying in and not selling for many decades, so the crazy swings wont matter (when you zoom out over time). If they dollar cost average into the market (invest a set amount of money every week or month) then they buy more when the market crashes. It's technically a good thing. Like buying something you wanted when its on sale.
@JeffTeeples Thank you very much Jeff. I'm debating with me being in my mid 40s if I should look towards adding some growth ETFs to my portfolio. Edit: and now your video about which to invest in based on your age just popped up. So I'm gonna watch that video.
@@harrambeejackson1300 I think that video will give a rough guide. It will vary for each individual investor based on risk tolerance, goals, age, working situation, and current wealth. But I think for people like us (in our 40's), a nice mix is a good way to go. Growth should probably be sprinkled in as long as you expect to work for at least 10 more years.
A lot of SMH recent growth is just from one single stock NVDA. Definitely higher risk but if you trust in the tech sector, semiconductor sector growth is highly correlated with tech. So i am allocating about 10%-15% of my portfolio to SMH and/or individual semiconductor stocks. The rest being mostly Voo, schd and Qqqm. 😊
I think that is a great plan. SMH has a long history of outperformance overall. VOO / SCHD / QQQM is a great base portfolio. Doesn't hurt to capture the long-term gains of SMH in addition to that!
Thanks for watching & for the question. Generally speaking, it's best to balance by putting the new invested dollars to the underweight holdings. However, if things get way out of balance, you may need to rebalance. With this, you'll generally want to sell any unrealized losses first (if any), and then long-term gains second (tax lots you have held for more than a year). I think you read my mind, my Thursday video will discuss how to rebalance and or sell.
I have money sitting in my Roth that I want to put into VGT, but I am waiting for a dip. Should I just bite the bullet? Sounds like you don't try to time the market at all with your buys. Do you ever wait for a dip to deploy cash?
This is a tough one, and I don't know if there is a one size fits all. For me, I systemize the 'dip buying' by sticking to my cash allocations. I keep cash at 10% at all times (in a money market currently, but sometimes in high yield savings accounts). When the market climbs higher and higher, I naturally invest in cash as I put new money in (to get it back to 10%). When the market dips, I deploy the cash into my allocations to get them back to their target. This means I'm buying the most beat up ETFs. So, technically, I do 'wait for the dip', but it is on autopilot. You may want to start slowly dollar cost averaging in. Or, you could wait, and let your money grow at ~5% in cash equivalents for the time being. It's a personal decision, and one that I don't think I have the 'right answer' to. Hindsight can make us look silly at times, which is why I use a system. If investing is like gambling, I want to be the house (:
FTEC is great. It follows the same index. Price is irrelevant, assuming fractional shares are available at the online broker, because they have the exact same holdings (each dollar increases or decreases by the same amount). Vanguard funds are usually more popular because they are all low-cost, and available everywhere. But there are many cases where other ETFs are the exact same, and sometimes even with slightly lower expense ratios (like FTEC). You can't go wrong either way.
Thanks for watching and for the question. I think you have a killer combo going. Keep feeding that and you’ll likely be a happy camper over the years. If you want more tech, VGT is a great addition. But QQQM is a bit more balanced, and is always a great ETF. Any combination of the two is great in my opinion. There is overlap, but remember, QQQM has 100% overlap with QQQM, and same with VGT. So as long as your overall ‘growth portion’ stays the same (not touching VOO or SCHD), then a mix is fine.
Why is that no one ever seems to talk about FTEC but VGT and QQQ always get all the glory? FTEC seems to be the better buy, lower expense ratio, and outperforms VGT on a back test.
FTEC is great. I think it is that VGT is more universally available. Way more people have access to Vanguard funds, in general, and the assets under management are a lot greater. So 'more people' will understand the reference of VGT vs FTEC (they are the same, and pointing out both each time would not make sense). There are many cases like this, for example, all of the S&P 500 funds are the same, but you mostly hear about VOO and SPY.
Looks to me like the best growth ETF for the last 5 yrs and for 2014 has been SMH, making VGT look like a laggard. 10K in SMH is now 49K, VGT up to 32K. I don't recall the semi's outperforming QQQ until a few yrs ago. Chips and tech in everything nowadays with NVDA powering up the world.
Thank you for watching and commenting. SMH has definitely been the best in the past. There is a decent chance it will be moving forward as well. But 25 semiconductor companies making up 100% of the ETF is just too scary for me.
Hey Jeff, I’m a rookie who just started in the investment game. When people say to diversify your asset mix in your portfolio. Do they mean # of shares or divide purchase price? For example 33 shares each into VOO,VGT,VYM to make up your 100% portfolio or $33 into the 3 etfs to make up the $100 you invested?
Hey Kevin, welcome to the investing party. There is a lot to learn (and I'm nowhere near knowing-it-all myself) in this world. It's a ton of fun. A share price, generally speaking, doesn't matter. You would want $33 in each of the holdings to be 'evenly invested' in them (if that's the goal). If ETF A was $100 per share, you would own .33 shares. If ETF B was $11 per share, you would own 3 shares. You own the 'exact same amount' of each with .33 shares of one and 3 shares of the other. It's all about the dollar split. You'll often hear people say things like 'VOO is so expensive, so I buy SPLG'. These both track the S&P 500 index, and are exactly the same holdings. SPLG is about $60 per share, and VOO is $465. Putting $500 into each would get you the exact same holdings, that would grow at the exact same amount. So 'expensive' doesn't 'mean anything'. However, where it can actually come into play is if you broker does not allow fractional shares. If you had, say, $300 to invest, and you had to buy in full shares, then you would want to roll with SPLG in that example. So it technically 'can matter', but rarely.
Awesome video! Thanks for the valuable input. I just buy-in VGT and your video came at the right time to confirm my choice. I’m a tech lover and believe that tech will continue to strive. 😊👍🏻 Subscribe to your channel! 👍🏻 What do you think of these 3 combos: VOO + VGT + QQQM? Any input on it? 😊
Thanks for watching and subscribing. I appreciate it! I think that is a great combo for someone that has a lot of years left to work and invest. It is very growth heavy (VGT, QQQM, and half of VOO), so it will come with volatility at times. When it crashes, stay the course and keep buying when everyone else is selling and running for the hills. I have the exact same combo + SCHD in my personal portfolio. I like SCHD for a floor protector. When everything crashes down it usually remains stable. But if you're under 40 and have nerves of steel, those 3 are great. It's the people that sell low (after crash) that really lose out on growth ETFs.
Thanks as always for your content. I bought a fractional shares of QQQM earlier this month but Im going back to FTEC. St. Louis in the house. 5.5 hours of Double Time on my day off over with. Time to get some sleep.
I like SPMO quite a bit. It's fallen short of my favorite growth ETFs, but it is still very solid. Since it had data on 10/19/2015, here are the total returns: VGT: 493.75% QQQ: 376.21% SPMO: 298.80% I will continue to track and consider it moving forward.
Interesting. I’ve followed SMH for a long time, and always have had data since mid 2000. I wonder if they use index data from before the ticker technically existed. For example, VOO has only been around since 2010 or so, but the S&P 500 has many more decades.
SMH was originally the HOLDRS Market Vectors Semiconductor ETF from Merrill Lynch listed on May 5, 2000. VanEck acquired SMH and the other HOLDR ETFs (OIH is another popular one) back in December of 2011.
How are the return data calculated? I’m currently in VONG and it looked to me like this was the best growth etf so maybe you can teach me something. Thanks !
Hey Tim, thanks for the question. You'll want to make sure you are viewing 'total return' instead of 'price return'. If something just simply says 'return' it usually means that it is NOT total return. I use Seeking Alpha to gather this information (along with a few other sites, but SA is my primary). I'm looking at the 10 year now (so this will be different than the video figures), and I see the following: VGT: 549.5% QQQ: 460.1% SCHG: 343.1% VONG: 339.7% Same story on the 5 year total return.
Thank you so much for your response and time! It looks like I have to do some adjusting to my “growth” investment. Thank you for the videos you put out as well.
Hi Jeff! I have a question for you. I would like to rollover my retirement account from vanguard to fidelity. Should I liquidate all of my assets(mutual funds) first before starting a rollover process? Please let me know.
Thanks for the question. I would contract Fidelity and explain you would like to transfer the account from Vanguard to Fidelity. They will require some basic information and make sure everything is done efficiently. I’ve only rolled over 3 previous 401k plans to my E*Trade rollover IRA. In that case, the liquidation happened automatically.
I've decided that my final asset allocation table would be SCHD/IVV/XLK, 40/30/30. I know that nobody knows the right answer, but what you would do if you had 300K in cash to invest. It's so difficult for me to decide...I am thinking of getting SCHD/DGRO 60/40 split for now, and then slowly(depends on the market) but surely move towards the final asset allocation.
@@andreyshulgin5984 this is always a tough one. I’m a fan, personally, of ‘getting it over with’ I would lump sum the majority into the new desired asset allocation. Then I would aggressively DCA in the remaining amount within 6 months or so. Buying the assets back to their allocations (buying more of the ones that underperform).
Hey Griffin. I think so. With a Roth you'll want the investments that have the highest returns over time, regardless of the gain type (price appreciation, qualified dividends, ordinary dividends, or interest). Because there are zero taxes (:
Oh man I love that one-two punch. I'm VGT for growth, but always thinking about mixing in QQQM and it's juicy long-term returns (39 years of smashing the market, and only 7 down years ever). VGT is my baby, and it has been the better pick. I believe in tech in the future. But a little voice in my head will say 'a mix wouldn't be so bad' (: QQQM won last year, too. It goes back and forth.
Can you make a portfolio of the top 3 or 4 funds you showcased today? Would you be top heavy with SMH? I’m curious to see how you would personally invest in these funds, what percentage amounts into each one for hedge and protection and long term growth. Thanks.
If I had to put ALL of my money into these growth ETFs, with nothing in SCHD, VOO, or others. I may do something like this: QQQM: 50% (no SCHG, VONG, or VUG) VGT + XLK for total of 35% (any mix, this is like picking between VOO, VTI, or both) SMH 15% The reason for the weight in QQQM is that a portfolio needs balance. I love tech, but don't want 100% tech. QQQM will self-update over the years with other sectors. It takes 100 of the largest companies (like the S&P 500) strictly by market cap. So you always have the producing companies. It has dominated the S&P 500 for 39 years. VGT and XLK because I love tech. And SMH a little light because it is very, very niche. Literally only 25 companies of the same type (semiconductors). With my portfolio, because I get to hold SCHD, I lean more to the VGT/XLK for growth (I'm okay with 100% tech because SCHD is very low in it). Lots of ways to do it. Ultimately it's about balance for long-term performance.
@@JeffTeeplesthank you so much Jeff. Much appreciated. Right now I have 2 pies with M1, 1. VTI, VOO 50/50, 2. SCHD, VGT 50,50. Should I try to incorporate QQQM, SMH & XLK into these existing pies or make a separate pie for these? What percentages if you add to my existing pie or make a new pie? I knows it’s like splitting hairs and it’s impossibly to make the perfect portfolio, but I want to create the best pies to beat the market long term. Thanks again.
@@BW-kv9wj I love the pies you have built as is. Adding one of the others definitely wouldn’t hurt. QQQM would probably be my pick. I think it would replace VGT. That pie could become 50% SCHD and 25/25 of VGT/QQQM. You can go more or less growth vs dividend based on your situation. But ‘if’ you want to keep your current type mix, I would remove VGT to add QQQM (like roles).
@@JeffTeeplesI just added SMH 30% to my SCHD 35%, VGT 35% pie. I’m trying to figure how to add QQQM & XLK to the mix without adding too many more pies?
@@BW-kv9wj the best growth ETFs are all great, and come down to preference. To add SMH or XLK, or any others, I would replace growth with growth. For example, I would not reduce SCHD to add SMH. I would make a ‘growth ETF’ pie that has 100%. A dividend ETF pie. And a cornerstone ETF pie. Then have an ‘overall’ mix that you want. For example, maybe it’s 40% growth, 30% dividend, 30% cornerstone. Then, you can add all the growths to the pie to the desired amount, without changing ‘growth’ (as an overall category) to be overweight.
Hi Jeff - This is one of your many outstanding videos! I really enjoyed your comments towards the end of your video about being disciplined about your portfolio allocations. What range of portfolio allocations would you recommend for VOO, VGT, SCHD, individual stocks, and cash?
Thanks for watching Bruce! Great question. It will vary based on a persons age, goals, current wealth, risk tolerance, and work situation. For example, if someone has millions and millions of dollars, they can afford to go heavy into growth in their 70's. But that is rare, and generally speaking, young people will be heavy in growth & older, or retired folks, will be heavier in dividends. For me, right now in my early 40's, I like the following: 10% cash (money market at 5.3%, VMFXX) at all times to automate timing) 80% I like in my 'long-term' portfolio, which is a third each (or so, touch higher in VGT at times) of VGT, SCHD, and VOO. 10% in a combination of individual stocks & bitcoin. I started running an ETF (not a real one, but I look at it as if I was running it) back in April 2023. So far, it is up 38.56% to VOOs 22.88% in that time. However, it is crazy early and who knows what the future will bring. I created a screener, a nerdy spreadsheet that weights 9 factors, etc. It makes it fun for me! So if I end up underperforming with ~7% of my portfolio, it's worth it to me. However, I would keep low-cost, passively managed ETFs as the vast majority of any portfolio at any age.
Is it wrong to invest VTI / VOO 50/50? I know they pretty much the same but one has way more companies than the other and over time, they’re returns are different. Can I use both 50/50 to hedge each other?
Thank you for watching & for the comment. It is not wrong at all. The misunderstanding of portfolio overlap is one of my biggest bothers in the investing world as a math nerd. 50/50 mix of VOO and VTI is just fine, and it doesn't add a penny to your costs. I'm going to make a video soon about WHEN & WHY portfolio overlap hurts a portfolio.
Yes, it is too redundant. 10 year backtesting slightly favors VOO. I agree with Jeff's 3 fund portfolio idea of VGT, SCHD and VOO. SCHD will get you , what you would have missed with VTI. I recently sold off VTI and replaced with VOO and VGT.
@@karlbe8414 Absolutely. It is very redundant. Again, it doesn't 'hurt' anything to mix some VTI and VOO, but it doesn't necessarily help anything either. I like simple. I take VGT over XLK, but they are both great. I take VOO over VTI, both great. Etc.
I did, and I know you said they are interchangeable but from what i can tell XLK is just a bit better than VGT...yea VGT barely beat it in the 20 yr comparison, but honestly I'd favor the most recent decade than the previous decade if we're being honest here@@JeffTeeples
Regarding SMH, I feel as squeamish about it as traditional investors feel about the modern three fund portfolio. I was in it for a bit this past summer, but when push comes to shove I'd rather go back to stock picking than commit to just one industry.
Thanks for watching and commenting. I don’t, and likely won’t, hold SMH. I’m not saying it’s bad. In fact, it’s been objectively good for many years. But it’s a bit too niche for me. I like that VGT gets me small, mid, and large sized tech companies. Not 25 semiconductors only.
Hey Hanz. Bitcoin has been an incredible asset over the past decade. Maybe the best. I put a small portion of my portfolio into IBIT. There are a lot of BTC lovers and haters, I fall somewhere in the middle.
Hey Kevin. To be clear, I like VGT the best, but I don't know that it is 'objectively' the best. A lot of times I'll recommend QQQM to people instead because it is a bit more balanced (not 100% tech, but rather, 100 of the largest companies from the Nasdaq-100, which have a 40 year history of vastly outperforming the S&P 500). The reason I like VGT (slightly) better than QQQM is that I'm a huge tech bull. VGT has crushed QQQ in the past 5 and 10 years with this tech trend. However, if you zoom out, QQQ is actually ahead over the past 20 years (it's close). QQQM has been better over the past 1 year as well. So it's very close. Of course, past performance is in the past. What I REALLY like about VGT is that I think tech (AI right now, but it will pivot to whatever comes next) will continue to do well in the FUTURE. That is all that matters. QQQM gets a nice slice of tech too. I think I'll eventually hold both QQQM and VGT. But for now, I'm all in on VGT to capture the big tech gains that I think will come in the next 5-10 years. I also like that VGT holds 300+ companies compared to XLK (under 100). Mixing in some small and mid sized tech companies is nice. I understand it is very heavy in MSFT and AAPL because of the market cap weightings, but still, I like a sprinkle of tech variety. This is why I pile up on SCHD as well. It has zero MSFT and AAPL, and my 'overall' exposure is about 10% for each of those companies. I'm okay with that because they are the main reason I've beat the traditional 3-fund portfolio by ~500k in the past 13 years.
This is awesome thank you Jeff for the in depth reply. What about ftec instead of vgt? A slightly lower expense ratio and lower share price. Which do you like better snd why?
@@Theweightlossdietitian Hey Kevin, FTEC is a nice alternative to VGT. They have the same underlying index. I like VGT better. It is available everywhere, has a high AUM, and I trust Vanguard management. That is true for all the Vanguard funds.
This is a smart man. Its simple not easy. Just buy and hold.
Thanks Robert. I appreciate the kind words. Smart may be a stretch (: but I am a simple man to be sure.
@@JeffTeeples Simple is soooo underrated!!!
keep pumping out those financial informational videos Jeff!!!!
Will do. Thanks Kevin.
New subscriber here! I’m glad I found this channel. Good information and easy to understand. I’m new to investing, and late to the party 😢 (52 years old) but very motivated, a month ago I started my first portfolio: VOO/VGT+QQQM - thinking about adding some SCHD.
Thank you for posting and keep up the good work!!!
Hey Ron. I'm glad you found the channel and more importantly got into investing! You certainly started off your portfolio the right way! Great holdings.
I think mixing in SCHD is a great move. You could slowly add it over time as you have new money to put into the market if you don't want to move things around at the moment.
Thanks for the video! All these funds are great in a diversified portfolio with VOO/VTI at the core. I did stop buying VGT a few years ago (I still hold a large position- not selling) due to the changes in the GICS sectors that took out Tesla, Amazon, Google, Meta, Visa, ADP, etc from VGT and made it a concentrated Apple and MSFT play. I have always liked SMH because it's a global fund which includes ASML and TSM. I also started a position in a cybersecurity ETF WCBR a year ago as this sector should grow in lockstep with AI.
Very nice feedback! You have great reasons for each thing you buy. Love the research and knowledge.
After that, it’s a matter of staying the course for a long period of time.
Amazing presentation Jeff. I am a QQQM guy betting on holding for a long term 10 years+
I think QQQM is the best ‘all around’ growth ETF. I love it. I bet you’ll be happy in 10+ years!
First 39 years have been great for the Nasdaq-100.
Love your content,Jeff. Found out about you through Auri. Thank you.
Thanks Johnny! I really appreciate the kind words. Ari is the man!
Same here.
@@harrambeejackson1300 Thank you for checking out the channel. It's much appreciated.
Hi Jeff! I have a $30,000 in a ROTH 401K with a previous employer that I am currently restructuring. I already bought about $10,000 of SCHD shares. I am thinking to buy $10,000 VGT or FTEC (this last one is much cheaper than VGT and it virtually has the same holdings however, less than 10B of AUM). That leaves me with $10,000 that I am thinking to invest in SMH. I want to point out I already have plenty of S&P 500 exposure in my TSP (a government version of the 401K) with 60% invested in the C fund, as well as $40,000 of VTI shares in my Vanguard Brokerage Account. Thanks so much for your highly educational and informative content!
I love that move. Especially because you have a nice chunk of the S&P 500 and VTI already. The VGT and SMH will be rollercoasters. But if you're patient for many years (or even decades) the payoff will likely be nice.
It's crazy because VOO is an awesome investment. It is my 'core strategy'. I always hold a chunk of the S&P 500.
But my 'other' holdings have outperformed it for EACH of the last 10 years (not just overall, every single year). That mix was primarily SCHD + VGT (even mix). It is wild. Will it continue to happen? No clue. But I have been riding it to great success for many years now. I will adjust as things change. VOO is always my 'if you're not beating it, adjust' radar (:
Thank you so much Jeff for the video! I love all of your videos! They are very helpful. Would you say XLK is better than VGT? I just started investing in VGT this month after watching your videos, but I just watched this video and wondered if I should just invest in the XLK? I would like to know your thoughts and advice. Thank you so much again!
Hey Jane. Thanks for the positive feedback and support, I appreciate it. VGT and XLK are very similar. They are both 100% tech. XLK is 'big tech' only, and it only holds 70 companies. VGT pulls in the same big tech, but also some mid and small cap as well. VGT holds 324 companies.
I like VGT, but I think picking either is fine. Here are the long-term returns:
Total returns last 10 years:
VGT: 563.14%
XLK: 550.42%
Total returns last 20 years:
VGT: 1,590.41%
XLK: 1,482.88%
@@JeffTeeples Thank you so much Jeff! Really appreciate your advice and information. That's very helpful!
Awesome review...beckons the q what direction do the next 20 yrs be ...odds are tech continues its tear as this sector seemingly has no limit. Everyone's heard of diversification but are we really better off spreading NVDA, APPL MSFT and GOOG's wealth to a bunch of under performing holdings? Why not just buy the winners?
Hey James. I do think tech will continue it's tremendous run moving forward. It is why I am a VGT bull to the fullest.
I still like a mix of value with SCHD, and a cornerstone with VOO, because we never know what will happen in the future.
I love tech, but so did people before the dot.com crash. I know this time is different than that, but we never see the wall coming until it is too late. Hindsight is always 20/20.
@JeffTeeples I too hold VGT...but NVDA, Apple msft and Google have all out performed vgt...got me thinking why balance ...go with the winners ...greater upside
I wish it was that easy. Often times todays winners are tomorrows losers. Riding the waves can work, but I have found better long-term success with buying the comparative dip by sticking to a balanced target allocations. Usually it’s not popular in the moment, though.
@JeffTeeples I ve been investing since 1987...I get where you're going...just this 'tech bubble'' s ' limit doesn't seem attainable at this pt. I'm on other stuff too...to be' safe' ....👍
For sure. I love tech, no doubt about it. Probably 'too heavy in tech' for most peoples tastes. I don't think it is going anywhere, long-term.
Nice comparison. I see a lot of chat about SCHG, but I think I would buy XLK or VGT, or even QQQM over it.
Thanks Mike! I'm with you on that one! They are all great, but I like a little more spice (including the highs and lows) with my growth section. I have VOO and SCHD to balance things out a bit when times are tough.
Can you make year specific strategies? I dont think the market abides by a calendar
Hey Michael. I'm with you 100% on that. Every investor is at a different place and has different goals. For these videos, I 'assume' long-term buy and hold with no panic selling. It is the only way to cover the masses, but to your point, it will absolutely not work for someone that is in a different spot.
For example, a retiree likely won't want to load up on VGT if they don't have the portfolio producing the passive income to get by with a nasty market crash.
I see the point of the foundational ETF (VOO) and growth (QQQm); but why the dividend ETF (SCHD) if investing for the long term; doesn’t this offset the growth ETF; to me if you were going to do this three fund portfolio why not go all in on VOO? I personally am all in on growth and DCA is my strategy; makes things simple and maximizes growth (my objective); I’m mid-30s with a 15-25 year time horizon before living off my holding (flexible, but striving for financial independence in 10-15 years if growth funds grow at their current rates); thoughts? Maybe a video to argue why a dividend ETF is useful given our presumed commonalities of age and investment objectives. Thanks for the useful video! Cements my 50/50 QQQm and XLK split I follow.
Thanks for watching & for the question.
I think a 50/50 mix of growth and cornerstone will work great over a long stretch of time as long as there is no selling going on. It's not for everyone, but you will very likely 'beat the market' over the next 20 years that way. Timing the market is what gets people in trouble.
I like dividend ETFs (SCHD for me) to raise my floor. I started as a Boglehead, and I think their 3-fund portfolio is solid. Then Warren Buffett got me all in on the S&P 500 as being the best long-term investment as a DCA person.
My goal evolved to beating the S&P 500 each year (if I can't, I'll join it). With 50% VGT / 50% SCHD, that has happened each of the past 10 years. In 2022, VGT was down 30%. Brutal year for tech. But I beat the market (VOO) in 2022 with the 50% SCHD carrying the load. I like the balance of 'trying to create a better VOO'. If I can beat the thing most smart people roll with, each year, I'll be a happy man.
The compound effect of the outperformance has been well into 6-figures for me. Yeah, it could be WAY more, but I like the floor being raised because we never know when the next big crash is coming. I DCA into my allocations to keep the balance with auto dip buying (buy whatever is the most beat up each week between VOO, VGT, and SCHD).
Great videos! Why not use FTEC instead of VGT? Lower expense ratio.
Thank you for the comment & question. VGT is more universally available than FTEC. It has almost 72 billion of assets under management to FTECs under 10 billion.
They do follow the same index, and will give basically identical results. I tend to use & like Vanguard funds for their wide spread availability and consistent low-cost structure.
And the founder is one of my favorite investors to follow of all time!
@Jeff,
Great content. Thanks for sharing your research.
How about this combination for a long-term investment strategy?
VOO 25.00%........ SCHD 25.00%........... (XLK or VGT) 25.00%..... QQQM 25.00%
Thank you for watching, for the feedback, and for being a member! Shoutouts coming in Sunday's video!
I think that is a fantastic mix of ETFs. It is a bit heavy in growth, but that is okay as long as there is a hard rule NOT to sell when the market crashes. It's more important than ever to dollar cost average more money into the allocations at that point.
Zoom out many years and you will very likely be a happy camper.
Thanks Jeff for your reply.
How do you calculate & compare higher & lower expense ratios? Which one come out ahead that VOO @0.03% exp ratio & VGT @ 0.01% exp ratio?
With expense ratios, the lower the better. Comparing a 0.03% to 0.10% isn’t going to make a large impact over time.
3 basis points will cost $3 per year for every $10,000 you have invested.
10 basis points will cost $10 per year for every $10,000 you have invested.
The returns are much more important.
However, there is a HUGE difference between .03% and .75%. That will compound to thousands of dollars.
Anything 20 basis points (0.20%) and below is great.
Great video Jeff. Do you not feel like you are missing out by not having invested a decent chunk in Meta, Google, Amazon and Tesla? Only QQQ has some small exposure to these (same for VOO)?
I believe in being data driven and following the numbers. I know you have a long history with VGT but again XLK has better performance, better CAGR and lower expense ratio.
You choose VOO over VTI as it’s more concentrated and you believe bigger companies have the advantage. I would liken VGT to VTI in that it holds many companies which can be a good thing, but can also drag things down. I own more than 700 shares of VGT so like you I am all in, but perhaps the numbers don’t lie. Keep up the good work.
Hey Michael,
Thanks for the feedback and questions.
You nailed it. VGT is more akin to VTI, and XLK is more like VOO. With 'the market', I like a slightly higher concentration (VOO). With tech, I like to trickle in more small and mid size (VGT).
VGT has outperformed XLK by 1% (so basically tied) over the past 20 years. I'm assuming you're referring to performance in past 1-3-5-10 years of XLK. The largest companies have been dominating, and therefore XLK and VOO have been outpacing VTI and VGT.
However, VGT and XLK are 82% identical by weight. With a 'tech sector only' set up, I prefer pulling in a few more companies. As of 2014, your feedback would be identical, only in the favor of VGT.
20 years being tied means they have identical CAGRs. I don't know if the next decade will be 'VTI or VOO' dominated. But it's a coinflip.
If one was BETTER over 20+ years, I would roll with it.
As far as the QQQ/QQQM, I have long considered adding a nice chunk. Not necessarily for the specific companies you mentioned, but for the balance it provides outside of tech in changing markets.
It is #1 over the past 20 years. For now, I'll roll with VGT. I usually only make BIG changes like that yearly (assuming nothing crazy happens). I could mix some in in 2025.
In the last 3-5-10 years, it has been a VERY good move not having QQQ mixed in with VGT. But I don't know what the next set of years will look like. QQQM won last year.
Great content, excellent presentation! Thank you. If you have not already, can you please make a video of % allocation to cornerstone, value and growth ETFs wrt years from retirement?
Thank you for watching and for the question! I made one a while back that I'll link to this comment. There is no 'perfect' one size fits all, but this should give a basic road map. Thanks!
Best ETF Allocation By Age:
ua-cam.com/video/mqmpaEOtO6o/v-deo.htmlsi=1BnwVrOERbi0ixD0
Great video - thank you! The 20 year perspective is interesting. I've often wondered if the small and micro cap exposure in ETFs like VGT and FTEC have ever been a factor or if it's just a diversification warm blanket. And I didn't realize SMH only holds 26 companies!
Thank you for the feedback CM! Also, I appreciate you being a member! I'm going to address that a little more in Sunday's video.
I'm working on developing a version of portfolio visualizer for conducting back tests in Excel with the holdings we discuss on the channel. This will be a WIP, and will soon be available in the nerdy spreadsheets.
I love the website, but I like to be able to throw in more scenarios on the fly. I also want to track my portfolio results year-by-year to show this stuff continues working. If I add, say, QQQM to my mix, I don't want it to change my historical results.
Oh yeah, people are extremely high on XLK and I hear how VGT & FTEC are duds by comparison. But then the same people say 'just you wait' about VTI catching VOO again. It's the exact same concept. All 5 are amazing.
VOO & XLK have been monsters lately because the bigger companies have been going off.
Great video Jeff. Nice analysis. Have been in the midst of adding several of these to various accounts. Thanks again.
Thanks for watching, Lance. Always appreciate the feedback!
How can we dollar cost averaging when purchasing shares of an ETF of the prices change throughout the day?? Or you mean we should set it up to automatically purchase say three shares every month regardless of the price for the day thank you
I was wondering what you thought of having 20% in Russell 2000 like VONG Russell 1000 Growth? I currently have QQQ, SCHD & VOO. I love the content that you bring on this channel.
Thanks for the question and comment! I think VONG is a solid ETF. I would like to do a video soon about it along with one about SCHG.
I love your current mix. Very solid long-term buy and hold solution! It will be extra juicy when the market crashes (don’t sell! Definitely remain a buyer at that point regardless of the noise around us).
Thanks Jeff, your opinion on ETFs like SPYG and VUG, SPYG 11% is part of my growth portfolio as is QQQM 11% and VGT 11% Regards
Hey Juan. Thanks for watching and for the question.
I think every growth ETF you mentioned is very solid. If you dollar cost average into that mix I bet you'll be a happy camper many years from now.
#1 thing is to not sell if the market crashes. Stay the course.
I like vgt but im in love with xlk.
Haha, nice. XLK has an amazing 20+ year history. There is plenty to love!
I finally convinced my wife we need to switch her retirement plan at work from he underperforming and expensive target date fund to FXAIX.
While an S&P index fund isnt ideal, its the best option available through her work. the change will save us $900/yr in expenses. And THEN rebalance our taxable account to 50% SCHD and 50% aggressive growth, adding FTEC to shares of UBER and MSFT to balance out our overall portfolio.
Amazing work my friend! If you stay the course for many years, your wife will be very happy!
My wife actually has her 401k in FXAIX as well. Mine was too before I rolled it over to my rollover IRA. It’s a great fund to cost average into.
Hi Jeff what do you think of FTEC?
I like FTEC. It follows my favorite tech specific underlying index. Will have some ups and downs short term, but I love the play long-term.
I’m up over 100% on my FTEC (VGT). Plan to hold for multiple decades, regardless of market conditions.
Does FTEC compare to this ? It's less expensive with a lower expense ratio.
Thanks for the question. FTEC is a great alternative to VGT. It has the same underlying index.
@@JeffTeeples Thank you for the quick response. I had recently begun an FTEC position in my ROTH IRA and was exploring alternatives just in case there was something I liked better in this sector.
Fire content , Keep it up 🙋♂
Out of curiosity, is there any chance to collaborate with you as video editors to build up your personal brand?
I appreciate the positive feedback. I'm not currently looking to make any editing changes. Thank you!
Great video! if you had to choose buy one and hold, would it be FTEC or XLK?
Thanks for watching! I would pick FTEC for more coverage of small and mid size tech. But these are ‘basically’ the same, long-term.
awesome video, im learning a lot
Thank you for the kind words. I appreciate the feedback.
What platform did you use to look up the 20 year? Do you also have one that looks at average annual return percentages? If so mind sharing?
Hey Richard, thanks for the question. I use Seeking Alpha total returns for those figures. I have a link in the description if you're interested in trying Seeking Alpha Premium for free.
I don't have one that shows the yearly % in a single snapshot. Although I am putting together a spreadsheet (slowly over time) that does fill in the yearly returns for my favorite growth ETFs. It's still a work in progress. I use portfolio visualizer to make sure my numbers are correct.
It's cool because I compare the different CAGRs over stretches of time for the growth ETFs. This will likely be something I share in the future as I slowly fill it out.
Hi again Jeff! What are your thoughts on QQQJ?
Thanks for your input!
Thank you for your question. I'm going to be honest here and let you know I don't know anything about that ETF. Taking a very quick look at the returns, it has drastically underperformed QQQ over the last 3 years:
Total Returns:
QQQ: 32.53%
QQQJ: -11.32%
I will say that I don't have an educated opinion on *why* that is the case. The top 10 holdings seem very weird compared to most ETFs I look at.
Im new to investing, and have a question. What is the goal in having growth ETFs in your portfolio? Is it to hold then sell much later? Currently, my portfolio consists of some individual stocks, and SCHD dividend ETF. Thanks
Hey Harrambee. Thanks for the question.
You nailed it. There are two primary ways for investors to make money with stocks or ETFs:
1) Price appreciation (growth stocks or ETFs)
2) Dividends (dividend stocks or ETFs)
To be clear, many growth companies also pay dividends (such as Apple and Microsoft), so it can get a little gray.
To keep it fairly simple, you would buy a dividend ETF, like SCHD, to receive cash flow with a quarterly dividend payment. You also hope for some price appreciation as well.
You would buy a growth ETF, like VGT, hoping for the price to increase drastically before you sell it. It pays a small dividend as well, but the primary focus is on the growth of the companies that make up the ETF. Instead of paying you, the owner, a quarterly dividend, they money is reinvested in the company to produce more future profits.
Generally speaking, but not always, VGT will have higher 'total returns', which is price appreciation + dividend income, than SCHD over long stretches of time. But, it will also be a rollercoaster. In 2022, for example, VGT had a total return of negative 30%. SCHD was only down 3% in that year. SCHD is much more stable.
So generally speaking, younger people with many years left to invest will want more growth ETFs like QQQM and VGT in their portfolio. This is because they will be buying in and not selling for many decades, so the crazy swings wont matter (when you zoom out over time). If they dollar cost average into the market (invest a set amount of money every week or month) then they buy more when the market crashes. It's technically a good thing. Like buying something you wanted when its on sale.
@JeffTeeples Thank you very much Jeff. I'm debating with me being in my mid 40s if I should look towards adding some growth ETFs to my portfolio.
Edit: and now your video about which to invest in based on your age just popped up. So I'm gonna watch that video.
@@harrambeejackson1300 I think that video will give a rough guide. It will vary for each individual investor based on risk tolerance, goals, age, working situation, and current wealth.
But I think for people like us (in our 40's), a nice mix is a good way to go. Growth should probably be sprinkled in as long as you expect to work for at least 10 more years.
A lot of SMH recent growth is just from one single stock NVDA. Definitely higher risk but if you trust in the tech sector, semiconductor sector growth is highly correlated with tech. So i am allocating about 10%-15% of my portfolio to SMH and/or individual semiconductor stocks. The rest being mostly Voo, schd and Qqqm. 😊
I think that is a great plan. SMH has a long history of outperformance overall. VOO / SCHD / QQQM is a great base portfolio. Doesn't hurt to capture the long-term gains of SMH in addition to that!
My portfolio ratios are all messed up. To balance the ratios to what i want, should i sell or buy more?
Thanks for watching & for the question. Generally speaking, it's best to balance by putting the new invested dollars to the underweight holdings.
However, if things get way out of balance, you may need to rebalance. With this, you'll generally want to sell any unrealized losses first (if any), and then long-term gains second (tax lots you have held for more than a year).
I think you read my mind, my Thursday video will discuss how to rebalance and or sell.
@@JeffTeeples Awesome, thank you Jeff!
I have money sitting in my Roth that I want to put into VGT, but I am waiting for a dip. Should I just bite the bullet? Sounds like you don't try to time the market at all with your buys. Do you ever wait for a dip to deploy cash?
This is a tough one, and I don't know if there is a one size fits all.
For me, I systemize the 'dip buying' by sticking to my cash allocations.
I keep cash at 10% at all times (in a money market currently, but sometimes in high yield savings accounts). When the market climbs higher and higher, I naturally invest in cash as I put new money in (to get it back to 10%).
When the market dips, I deploy the cash into my allocations to get them back to their target. This means I'm buying the most beat up ETFs.
So, technically, I do 'wait for the dip', but it is on autopilot.
You may want to start slowly dollar cost averaging in. Or, you could wait, and let your money grow at ~5% in cash equivalents for the time being. It's a personal decision, and one that I don't think I have the 'right answer' to.
Hindsight can make us look silly at times, which is why I use a system. If investing is like gambling, I want to be the house (:
VGT is $500+ what’s thought on FTEC
FTEC is great. It follows the same index. Price is irrelevant, assuming fractional shares are available at the online broker, because they have the exact same holdings (each dollar increases or decreases by the same amount).
Vanguard funds are usually more popular because they are all low-cost, and available everywhere. But there are many cases where other ETFs are the exact same, and sometimes even with slightly lower expense ratios (like FTEC). You can't go wrong either way.
I already have VOO+SCHD+QQQM, but should I change it to VOO+SCHD+VGT ? 🤔
Thanks for watching and for the question. I think you have a killer combo going. Keep feeding that and you’ll likely be a happy camper over the years.
If you want more tech, VGT is a great addition. But QQQM is a bit more balanced, and is always a great ETF.
Any combination of the two is great in my opinion. There is overlap, but remember, QQQM has 100% overlap with QQQM, and same with VGT. So as long as your overall ‘growth portion’ stays the same (not touching VOO or SCHD), then a mix is fine.
Why is that no one ever seems to talk about FTEC but VGT and QQQ always get all the glory? FTEC seems to be the better buy, lower expense ratio, and outperforms VGT on a back test.
FTEC is great. I think it is that VGT is more universally available. Way more people have access to Vanguard funds, in general, and the assets under management are a lot greater. So 'more people' will understand the reference of VGT vs FTEC (they are the same, and pointing out both each time would not make sense).
There are many cases like this, for example, all of the S&P 500 funds are the same, but you mostly hear about VOO and SPY.
Looks to me like the best growth ETF for the last 5 yrs and for 2014 has been SMH, making VGT look like a laggard. 10K in SMH is now 49K, VGT up to 32K. I don't recall the semi's outperforming QQQ until a few yrs ago. Chips and tech in everything nowadays with NVDA powering up the world.
Thank you for watching and commenting. SMH has definitely been the best in the past. There is a decent chance it will be moving forward as well.
But 25 semiconductor companies making up 100% of the ETF is just too scary for me.
Hey Jeff, I’m a rookie who just started in the investment game. When people say to diversify your asset mix in your portfolio. Do they mean # of shares or divide purchase price? For example 33 shares each into VOO,VGT,VYM to make up your 100% portfolio or $33 into the 3 etfs to make up the $100 you invested?
Hey Kevin, welcome to the investing party. There is a lot to learn (and I'm nowhere near knowing-it-all myself) in this world. It's a ton of fun.
A share price, generally speaking, doesn't matter. You would want $33 in each of the holdings to be 'evenly invested' in them (if that's the goal).
If ETF A was $100 per share, you would own .33 shares. If ETF B was $11 per share, you would own 3 shares. You own the 'exact same amount' of each with .33 shares of one and 3 shares of the other. It's all about the dollar split.
You'll often hear people say things like 'VOO is so expensive, so I buy SPLG'. These both track the S&P 500 index, and are exactly the same holdings. SPLG is about $60 per share, and VOO is $465. Putting $500 into each would get you the exact same holdings, that would grow at the exact same amount. So 'expensive' doesn't 'mean anything'.
However, where it can actually come into play is if you broker does not allow fractional shares. If you had, say, $300 to invest, and you had to buy in full shares, then you would want to roll with SPLG in that example. So it technically 'can matter', but rarely.
@@JeffTeeples thanks for the response Jeff 🙏
Much appreciated
How do you dca? weekly? monthly? every dip?
Hey JC. I am a fan of weekly. I choose to DCA in every Monday. But daily, weekly, or monthly are all viable options as long as we stay consistent.
Awesome video! Thanks for the valuable input. I just buy-in VGT and your video came at the right time to confirm my choice. I’m a tech lover and believe that tech will continue to strive. 😊👍🏻 Subscribe to your channel! 👍🏻
What do you think of these 3 combos: VOO + VGT + QQQM? Any input on it? 😊
Thanks for watching and subscribing. I appreciate it!
I think that is a great combo for someone that has a lot of years left to work and invest. It is very growth heavy (VGT, QQQM, and half of VOO), so it will come with volatility at times. When it crashes, stay the course and keep buying when everyone else is selling and running for the hills.
I have the exact same combo + SCHD in my personal portfolio. I like SCHD for a floor protector. When everything crashes down it usually remains stable. But if you're under 40 and have nerves of steel, those 3 are great. It's the people that sell low (after crash) that really lose out on growth ETFs.
Thanks as always for your content. I bought a fractional shares of QQQM earlier this month but Im going back to FTEC. St. Louis in the house. 5.5 hours of Double Time on my day off over with. Time to get some sleep.
Oh man, putting in that time! Thank you for the feedback. The good thing about all the hard work is that you'll have more money to put into FTEC (:
@JeffTeeples That's right! I'm 57. 12 more years to make a dent.
How's ur thought in SPMO
Thank you
I like SPMO quite a bit. It's fallen short of my favorite growth ETFs, but it is still very solid.
Since it had data on 10/19/2015, here are the total returns:
VGT: 493.75%
QQQ: 376.21%
SPMO: 298.80%
I will continue to track and consider it moving forward.
MGK can't get any love in these youtube streets lol. Thanks for the analysis.
Thanks for the feedback. MGK is a great replacement or addition to the other growth ETFs (:
Love my VGT :D
You're speaking my language Jack. VGT has long been my favorite ETF. Love growth, tech, and Vanguard.
@@JeffTeeples I started investing in QQQ aswell a few months ago, but VGT is the best for me
Hi Jeff! SMH fund inception was on 12/20/2011. How could you calculate the total return since 02/02/2004? Maybe you meant SOXX?
Interesting. I’ve followed SMH for a long time, and always have had data since mid 2000. I wonder if they use index data from before the ticker technically existed.
For example, VOO has only been around since 2010 or so, but the S&P 500 has many more decades.
SMH was originally the HOLDRS Market Vectors Semiconductor ETF from Merrill Lynch listed on May 5, 2000. VanEck acquired SMH and the other HOLDR ETFs (OIH is another popular one) back in December of 2011.
Instead of VGT I would get FTEC (it has very less expense ratio and same performance)
Thanks for the comment. FTEC is a great replacement for VGT.
How are the return data calculated? I’m currently in VONG and it looked to me like this was the best growth etf so maybe you can teach me something. Thanks !
Hey Tim, thanks for the question. You'll want to make sure you are viewing 'total return' instead of 'price return'. If something just simply says 'return' it usually means that it is NOT total return.
I use Seeking Alpha to gather this information (along with a few other sites, but SA is my primary).
I'm looking at the 10 year now (so this will be different than the video figures), and I see the following:
VGT: 549.5%
QQQ: 460.1%
SCHG: 343.1%
VONG: 339.7%
Same story on the 5 year total return.
Thank you so much for your response and time! It looks like I have to do some adjusting to my “growth” investment.
Thank you for the videos you put out as well.
Hi Jeff! I have a question for you. I would like to rollover my retirement account from vanguard to fidelity. Should I liquidate all of my assets(mutual funds) first before starting a rollover process? Please let me know.
Thanks for the question. I would contract Fidelity and explain you would like to transfer the account from Vanguard to Fidelity. They will require some basic information and make sure everything is done efficiently.
I’ve only rolled over 3 previous 401k plans to my E*Trade rollover IRA. In that case, the liquidation happened automatically.
Thank you!🙂@@JeffTeeples
I've decided that my final asset allocation table would be SCHD/IVV/XLK, 40/30/30. I know that nobody knows the right answer, but what you would do if you had 300K in cash to invest. It's so difficult for me to decide...I am thinking of getting SCHD/DGRO 60/40 split for now, and then slowly(depends on the market) but surely move towards the final asset allocation.
@@andreyshulgin5984 this is always a tough one. I’m a fan, personally, of ‘getting it over with’ I would lump sum the majority into the new desired asset allocation.
Then I would aggressively DCA in the remaining amount within 6 months or so. Buying the assets back to their allocations (buying more of the ones that underperform).
Thank you for the advice!@@JeffTeeples
FTEC, XLK, IYW
Hey Alek, very nice selections across the board. Can’t go wrong there, long-term.
Should I invest into this with a Roth?
Hey Griffin. I think so. With a Roth you'll want the investments that have the highest returns over time, regardless of the gain type (price appreciation, qualified dividends, ordinary dividends, or interest). Because there are zero taxes (:
Great video!
Thanks the watching!
I do VGT and QQQ for growth
Oh man I love that one-two punch. I'm VGT for growth, but always thinking about mixing in QQQM and it's juicy long-term returns (39 years of smashing the market, and only 7 down years ever).
VGT is my baby, and it has been the better pick. I believe in tech in the future. But a little voice in my head will say 'a mix wouldn't be so bad' (:
QQQM won last year, too. It goes back and forth.
what about VUG?
I'm a fan of VUG. I include it in my newer 'best growth ETF' videos. It still falls behind SCHG, QQQM, and VGT for my personal growth tiers.
Can you make a portfolio of the top 3 or 4 funds you showcased today? Would you be top heavy with SMH? I’m curious to see how you would personally invest in these funds, what percentage amounts into each one for hedge and protection and long term growth. Thanks.
If I had to put ALL of my money into these growth ETFs, with nothing in SCHD, VOO, or others. I may do something like this:
QQQM: 50% (no SCHG, VONG, or VUG)
VGT + XLK for total of 35% (any mix, this is like picking between VOO, VTI, or both)
SMH 15%
The reason for the weight in QQQM is that a portfolio needs balance. I love tech, but don't want 100% tech. QQQM will self-update over the years with other sectors. It takes 100 of the largest companies (like the S&P 500) strictly by market cap. So you always have the producing companies. It has dominated the S&P 500 for 39 years.
VGT and XLK because I love tech. And SMH a little light because it is very, very niche. Literally only 25 companies of the same type (semiconductors).
With my portfolio, because I get to hold SCHD, I lean more to the VGT/XLK for growth (I'm okay with 100% tech because SCHD is very low in it).
Lots of ways to do it. Ultimately it's about balance for long-term performance.
@@JeffTeeplesthank you so much Jeff. Much appreciated. Right now I have 2 pies with M1, 1. VTI, VOO 50/50, 2. SCHD, VGT 50,50.
Should I try to incorporate QQQM, SMH & XLK into these existing pies or make a separate pie for these? What percentages if you add to my existing pie or make a new pie? I knows it’s like splitting hairs and it’s impossibly to make the perfect portfolio, but I want to create the best pies to beat the market long term. Thanks again.
@@BW-kv9wj I love the pies you have built as is.
Adding one of the others definitely wouldn’t hurt. QQQM would probably be my pick. I think it would replace VGT.
That pie could become 50% SCHD and 25/25 of VGT/QQQM.
You can go more or less growth vs dividend based on your situation. But ‘if’ you want to keep your current type mix, I would remove VGT to add QQQM (like roles).
@@JeffTeeplesI just added SMH 30% to my SCHD 35%, VGT 35% pie. I’m trying to figure how to add QQQM & XLK to the mix without adding too many more pies?
@@BW-kv9wj the best growth ETFs are all great, and come down to preference.
To add SMH or XLK, or any others, I would replace growth with growth.
For example, I would not reduce SCHD to add SMH. I would make a ‘growth ETF’ pie that has 100%. A dividend ETF pie. And a cornerstone ETF pie.
Then have an ‘overall’ mix that you want. For example, maybe it’s 40% growth, 30% dividend, 30% cornerstone.
Then, you can add all the growths to the pie to the desired amount, without changing ‘growth’ (as an overall category) to be overweight.
Hi Jeff - This is one of your many outstanding videos! I really enjoyed your comments towards the end of your video about being disciplined about your portfolio allocations. What range of portfolio allocations would you recommend for VOO, VGT, SCHD, individual stocks, and cash?
Thanks for watching Bruce! Great question.
It will vary based on a persons age, goals, current wealth, risk tolerance, and work situation. For example, if someone has millions and millions of dollars, they can afford to go heavy into growth in their 70's. But that is rare, and generally speaking, young people will be heavy in growth & older, or retired folks, will be heavier in dividends.
For me, right now in my early 40's, I like the following:
10% cash (money market at 5.3%, VMFXX) at all times to automate timing)
80% I like in my 'long-term' portfolio, which is a third each (or so, touch higher in VGT at times) of VGT, SCHD, and VOO.
10% in a combination of individual stocks & bitcoin.
I started running an ETF (not a real one, but I look at it as if I was running it) back in April 2023. So far, it is up 38.56% to VOOs 22.88% in that time. However, it is crazy early and who knows what the future will bring. I created a screener, a nerdy spreadsheet that weights 9 factors, etc. It makes it fun for me! So if I end up underperforming with ~7% of my portfolio, it's worth it to me.
However, I would keep low-cost, passively managed ETFs as the vast majority of any portfolio at any age.
Love it the way you explain and expertise.Appreciate your help
I appreciate the kind words! Thanks for watching.
Is it wrong to invest VTI / VOO 50/50? I know they pretty much the same but one has way more companies than the other and over time, they’re returns are different. Can I use both 50/50 to hedge each other?
Thank you for watching & for the comment. It is not wrong at all. The misunderstanding of portfolio overlap is one of my biggest bothers in the investing world as a math nerd. 50/50 mix of VOO and VTI is just fine, and it doesn't add a penny to your costs.
I'm going to make a video soon about WHEN & WHY portfolio overlap hurts a portfolio.
Yes, it is too redundant. 10 year backtesting slightly favors VOO. I agree with Jeff's 3 fund portfolio idea of VGT, SCHD and VOO. SCHD will get you , what you would have missed with VTI. I recently sold off VTI and replaced with VOO and VGT.
@@karlbe8414 Absolutely. It is very redundant. Again, it doesn't 'hurt' anything to mix some VTI and VOO, but it doesn't necessarily help anything either.
I like simple. I take VGT over XLK, but they are both great. I take VOO over VTI, both great. Etc.
@@karlbe8414Ok. Thank you
XLK is a slightly cheaper VGT but better performing and a better CAGR...XLK is definitely the better choice
Thank you for the comment! XLK is great. Did you watch the full video?
Hydrid XLK/QQQm seems a logical combo given the data provided; good informative video!
@@CarlosMataShow it is a heck of a combo for sure!
I did, and I know you said they are interchangeable but from what i can tell XLK is just a bit better than VGT...yea VGT barely beat it in the 20 yr comparison, but honestly I'd favor the most recent decade than the previous decade if we're being honest here@@JeffTeeples
I would go FTEC or Vgt mixed with schg
VGT seems little high now waiting for a pull back to load
I thought lump sum beats dca
Hey Andy, thanks for the comment. Lump sum investing beats DCA more times than not. It comes with a higher ceiling and lower floor.
Regarding SMH, I feel as squeamish about it as traditional investors feel about the modern three fund portfolio.
I was in it for a bit this past summer, but when push comes to shove I'd rather go back to stock picking than commit to just one industry.
Thanks for watching and commenting. I don’t, and likely won’t, hold SMH.
I’m not saying it’s bad. In fact, it’s been objectively good for many years. But it’s a bit too niche for me.
I like that VGT gets me small, mid, and large sized tech companies. Not 25 semiconductors only.
Id say the dozen bitcoin etfs are blowing everyone elses doors off
Hey Hanz. Bitcoin has been an incredible asset over the past decade. Maybe the best. I put a small portion of my portfolio into IBIT. There are a lot of BTC lovers and haters, I fall somewhere in the middle.
I didn’t hear why you think vgt is the best? Why choose vgt?
Hey Kevin. To be clear, I like VGT the best, but I don't know that it is 'objectively' the best. A lot of times I'll recommend QQQM to people instead because it is a bit more balanced (not 100% tech, but rather, 100 of the largest companies from the Nasdaq-100, which have a 40 year history of vastly outperforming the S&P 500).
The reason I like VGT (slightly) better than QQQM is that I'm a huge tech bull. VGT has crushed QQQ in the past 5 and 10 years with this tech trend. However, if you zoom out, QQQ is actually ahead over the past 20 years (it's close). QQQM has been better over the past 1 year as well. So it's very close.
Of course, past performance is in the past. What I REALLY like about VGT is that I think tech (AI right now, but it will pivot to whatever comes next) will continue to do well in the FUTURE. That is all that matters. QQQM gets a nice slice of tech too. I think I'll eventually hold both QQQM and VGT. But for now, I'm all in on VGT to capture the big tech gains that I think will come in the next 5-10 years.
I also like that VGT holds 300+ companies compared to XLK (under 100). Mixing in some small and mid sized tech companies is nice. I understand it is very heavy in MSFT and AAPL because of the market cap weightings, but still, I like a sprinkle of tech variety. This is why I pile up on SCHD as well. It has zero MSFT and AAPL, and my 'overall' exposure is about 10% for each of those companies. I'm okay with that because they are the main reason I've beat the traditional 3-fund portfolio by ~500k in the past 13 years.
This is awesome thank you Jeff for the in depth reply. What about ftec instead of vgt? A slightly lower expense ratio and lower share price. Which do you like better snd why?
@@Theweightlossdietitian Hey Kevin, FTEC is a nice alternative to VGT. They have the same underlying index.
I like VGT better. It is available everywhere, has a high AUM, and I trust Vanguard management. That is true for all the Vanguard funds.
@@JeffTeeplesawesome thank you Jeff.
Great video 👍🏽
Thank you for the kind words, Aaron. Thanks for watching.