I love it! I'm glad to hear you are doing great and loving it. It really is exciting, and rewarding, to get the portfolio rocking without a financial advisor 'helping' you by stealing money in fees and investing in terrible assets for the 'kickback' at your expense. You made a great move!
I love that Fidelity has every account type available (or anything I've checked into anyway). The big knock for me is the website layout. E*Trade is so much cleaner it's wild. But Fidelity is highly rated and rightfully so. It is feature rich.
Hey Tom. Thanks for watching and commenting. The S&P 500, or total US market, are so great over time. Keep on dollar cost averaging in (especially when it crashes hard) and we will win over time.
Thanks Jeff! Keeping it simple has been key to the portfolio decisions I’ve made, and your videos have been invaluable. Keep reading…nothing wrong with you upstairs 😂
Haha, got a good chuckle from that. Thank you! (: I love keeping it simple. VOO or VTI (or the other similar options) are a great way to do it! That was the core of my portfolio before getting a little more creative (but still sticking to passively managed ETFs of course). I appreciate your extra support of this channel!
Great video Jeff. You're literally the reason I started anything. Been with you since you started geowing your channel. Keep up the good work. Need to upgrade to become a member.
I appreciate the kind words. I'm flattered that you have been here since the beginning. The support means a lot; this community has been great. If you join the membership that will be an amazing extra level of support. But either way you are helping the channel grow just be watching the videos and dropping comments.
I started a traditional 401k 22 years ago when I turned 21 so it's likely too late to roll that into a ROTH 401k without significant fees. So instead I started a Schwab account about 4 years ago and am focusing on SPYI and SCHD which is currently about 5% of net worth. I'm going to continue to focus on investing into those 2 ETF's moving forward so I can have that monthly income to help assist with living expenses as I move into my 50's. Thanks for the video.
Thanks for watching and for the feedback Leonard. I love the plan for supplementing your retirement income. In addition to that, you are also able to 'convert' some of your traditional IRA to a Roth IRA each year. You get to pick the exact amount you convert. It does add to your taxable income for that year, which is why it is best to do it over many years (instead of all at once, pushing you into the 37% bracket).
For sure. The dips are scary real-time. Seeing our portfolio go from $50,000 to $30,000 in a couple months is never fun. But we never lose any 'shares' of our ETFs. The dollars buy more shares during the drop. Eventually, the market hits all time highs again *per share*. I'm a fan of accumulating shares and chillin'. Eventually the math works out (for low-cost index tracking funds that is, of course there is long-term risk in many investments).
Thanks for another great video Jeff. I send your videos to my kiddos. I always tell them that I wish I had the knowledge that I have now at their age. They're in their 20s. If only I had that time on my side.
Thanks Christina! That is awesome that you send the videos to your kids. What a great mom (: I hope they get off to a better start than both of us did (:
Thanks Teeps! I feel like I have my base set now and am reinvesting my dividends in the places I want now. A little more risk here, a little more divies there. Keep up the good work helping everyone.
That is awesome! How is the portfolio doing lately? I love getting into more fine-tuned investing (as you know) with some other ETFs. Now it is still very passive, high-level, and simple. But VGT, QQQM, and SCHD are a great way to beat VOO most years with a balanced mix. However, if I could only have one, it would be VOO in a heartbeat by a mile (: Well... Unless I was retired and needed cash. Then I see SCHD smiling from afar (: My favorite thing about VOO is the 50/50'ish mix of value and growth (over the decades, I know we are a bit growth heavy currently, but the 'timing' will be 'perfect' as the underlying index shifts eventually. Takes out the guess work.
Hey Jeff, try making a few videos talking at regular speed. Iv been watching UA-cam personal finance videos for 4-5 years now. Iv learned a ton, but find myself gravitating towards people who just talk like they are chatting with their best friend. Try it out my friend. Keep putting out videos and spreading the word!
Hey Zach. Thanks for watching the video and for the feedback. Sadly that is my regular speed, lol. I'm assuming you would like me to speak a little faster?
Thanks Roy! I appreciate the kind words and the extra support you have given the channel. I like to mix in these videos about the basics. The goal is to help the masses. I also like to get a little deeper in the weeds as well. I'm dropping 2 videos this week! Should be a great week (:
Another great video…very informative! I wished I had this video 30 years ago. I’ll share it with the younger folks. You mentioned that M1 automatically does rebalancing…does Charles Schwab have that option? Maybe consider a video explaining it?? Thanks!
That is a great question. I know Fidelity has the baskets. I think it has a long ways to go to compete with M1 Finance's pies. I'm not sure about Schwab. I like to keep it simple. I went with E*Trade years ago because I think the interface is the cleanest by far. I have zero desire for fractional shares (with core holdings), and because E*Trade is a 'third party' in the investing world, it has all of the (good) investments available. Vanguard, Fidelity, and Schwab compete with each other directly. Didn't want to mess around with that (like VMFXX not being in Fidelity, for example). I probably 'should' mess around with all of them, but I'm going to be honest, the OCD in me doesn't like the idea. Long way of saying I'm not sure (:
Thank you, great entry point for newcomers and reminder for everyone to keep it simple! Would love to get your input on USMC as well. It does have a higher expense ratio at 0.12% but I noticed its returns have been a couple of percentage points higher than other S&P 500 ETFs, in the past 5 years at least (and I guess another downside to it is that it has < 10 years history).
Hey Amir. Thank you for the kind words and for the question. USMC looks like a solid ETF. It piles a lot of money into strictly mega-caps, which isn't necessarily good or bad in a vacuum. I personally like large cap better than small cap, all things considered, which is why I go for VOO over VTI. But USMC is a little too concentrated on large cap for my liking. The sector balance is alright, but it only holds 43 companies. I don't think that will bode well when the reversion to the mean happens and small and mid start to dominate again for a while. VTI will slightly outperform VOO when this happens. I'm not saying it is bad, I think it is solid. But it is a little too 'one-trick pony' for me. I like VOO better for similar reasons that I prefer VGT to XLK (more holdings, small and mid cap tech mixed in).
Got it, thanks Jeff! Yes that's a very good point about risk exposure coming from the limited number of holdings. I actually do hold XLG as well which is similar to XLK and USMC in that regard, so I'm due for some portfolio rebalancing to avoid this high mega cap concentration 😄 Thanks again!
Right!? It's is a crazy concept at first. A single ticker that: 1) Buys everything in proportion to the business being done in the US (VOO or VTI) 2) Automatically 'times the market' perfectly based on what *actually* happens, no more 'rotation guesses' 3) Beats over 96% of professionals actively managed funds, net of fees, long-term (closer to 99% counting funds that merge or go poof 4) Does all of this by automatically buying one single ticker and chilling If someone told me that in the beginning I would say BULL****!! (:
ThanX Jeff.... Great video.... Stay the course... Keep investing..... DCA and be patient.... GREAT advice for all investors. Thank you for your hard work and efforts on your videos and the information provided....!!! Have a safe & great July 4th weekend....
Thanks Lance! You too. Have a great 4th! It is a couple days before my birthday (I was due on the 4th according to the tales from my parents). My wife and I were born 3 days apart (well, 5 years and 3 days, but who's counting). My (awesome) mom is watching our kids later this week. We get to go on a date together. I don't even know if we remember how that works at this point! (darn kids)
@@JeffTeeples how cool. Enjoy the weekend and peaceful time bring with each other. My wife and I are 13 yrs apart - same birthday - July 31st plus we made it our wedding anniversary too. This way she doesn’t have to remember much. Lol. Happy early birthday to both of you and enjoy the weekend. Be well.
SPMO is my #1 as well. Take a look at GARP as a complement to it. Comparable performance over its existence (a little over 4 years), and not overly correlated. Unlike SPMO, it only has about 16% exposure to the Big 3 tech stocks, vs 31% for SPMO, so it's a little more diversified (only has >5% exposure to 3 stocks vs 7 for SPMO). I replaced SPLG in my portfolio with GARP.
Of course! It has been a busy weekend here, but I'm happy to announce that two videos will be dropping this week. Couple good ones, too (well, nerdy me thinks so).
Personally, I prefer a stable dividend growth ETF to the s&p500 for retirement income, such as SCHD or DGRO, as I dont want to sell off any of the principle I've accumulated over the decades so my heirs will have a notable inheritance (assuming they are worthy of it. Otherwise, it'll go to causes I deem worthy when I die). That being said, finding a low-cost S&P500 index fund is my go-to in a 401k.
Thank you for the comment. I'm with you 100% on the dividend growth ETFs over the 4% rule in retirement. I'll try to have a nice bit of VOO, VGT, and QQQM in there still IF the value allows it. But my priority will be heavily leaning to SCHD, maybe DGRO, and other income producing assets. I don't want to sell shares to produce my 3-5% per year. I like the 100% pass rate (:
Hi Jeff, thank you for another great video. I noticed in few of your comments that you against fructional shares. May I ask what is the reason behind it? I set up my weekly purchases same amount from different ETF's so it buys for me whole shares or fructioal if it is not enough to cover a whole share, is there anything wrong doing it?
Hey Idan. Fractional shares are great! It allows you to invest every dollar into the market. Fractional shares are objectively better than whole shares only. This is definitely a 'me' thing. I just like the clean look of whole numbers. There are zero performance reasons to do it the way I do.
@@JeffTeeples awesome Schg stands out to me with the lowest expense ratio and I can get more shares at 100 dollars a share. Your thoughts on 33% each or lean heavier on splg?
SCHG is great! I like having a third of each. But any amount of SPLG will work fine because it is balanced between growth and value in and of itself. The important thing for me is to keep 'growth' (SCHG) and 'value' (SCHD) balanced. When you add them together, they roughly create a 'SPLG like mix'. If you're younger, a growth tilt is common. Retired folks may go with a bit more value/dividends. I personally like the equal mix, but I'm also in my 40's so that makes sense (:
Contribute to Roth IRA and 401k in your younger, lower tax bracket years. As you rise up up the tax brackets switch to pre tax IRA and 401k. Let those grow yntil your late 30s/early 40s, and you might be able to reitre early by drawing from the Roths, and doing converting pre rax funds to Roth at a zero to low tax rate #FIREwheel
Amen! Music to my ears (: I always die a little inside when 12% and lower are focusing on pre-tax, or when 37% marginal tax folks are loading up on Roth over pre-tax.
The hardest part for me is sticking to my investing plan. I’ve been investing for about 3 years now and I always seem to change at least once a year. So many UA-cam videos with so many strategies. I’m promising myself to stick with your modern 3 fund portfolio.🤞🏻
Haha, I feel you. I think it is great to stay open-minded and make small adjustments as we go. But sticking to the overall plan is important long-term. If we try to change it up too often we will be inevitably buying high and selling low by comparison. Usually the 'trend' will be to jump on the hot thing (like growth lately, for example).
Thanks for watching. You got me excited, but unless this changed since Friday it isn't true. I tested just to be sure before I released the video. I never try to buy fractional shares, personally, because it drives me crazy. But I know a lot of people want this feature. E*Trade does allow us to 'reinvest' dividends via DRIP. This can be done with stocks or ETFs. Perhaps this is what you were thinking of?
@@JeffTeeples you can do it. You have to go under the trading tab and click Automatic Investing(could also be labeled Automatically Invest, I don’t quite remember exactly) but once you click that in the drop down menu it’ll take you to a screen where you type in the ticker for the ETF you want(as you type suggestions will appear in the drop down menu), once you select the ETF you put in the dollar amount you want it to invest and how often(weekly or monthly) it has a minimum amount required of $25. E*Trade puts in its automatic investments on Tuesdays. If you selected monthly you pick which Tuesday of the month. Hope that helps. I’ve been investing in SPY using this exact method for months now as I wanted SPY as the base for my portfolio and I couldn’t afford a full share. You’ll know if you can do it with a stock because when you search the stock you’ll see Auto-invest eligible at the top of the stock’s info page. You will see this if you search SPY for example.
Very cool! I had no idea E*Trade had this feature. I won't use it because I'm weird and I can't stand owning fractional shares, haha. Does the automatic investing feature have any fees attached? Or is it 100% fee free just as if I bought the ETF myself?
Nice video, as usual. You know, I always hear "the S&P ETF's out perform 90% Of assest managers...". I'm pretty sure this is a Buffet quote. Has anyone seen any data to back that up? It's not that I don't believe it, I just like to confirm what I hear. Trust but verify. Where could one go to find the data that is used to support this statement?
I currently have both types. I can say that since I have began investing on my own that the managed accounts trail the S&P500! Not to mention the fees for a managed account.
Hey Bryan. That is a great question. There is a ton of data to back it up. 90% is a very safe estimate that will 'never be wrong' over a long period of time. The 'Little book of common sense investing' has more concrete data about this. Many other books do as well, unfortunately they all run together at this point for me lol. You will find a lot of sources out there that will show different data points. The only way to *really* compare mutual funds and ETFs to the S&P 500 is to follow through specific tickers. Not just 'this many beat it this year and this many fell short'. What happens is statistically speaking, funds that beat the S&P 500 have a MUCH greater chance of losing the following year. Funds that fall short have a MUCH greater chance of beating the S&P 500 the following year. This is because the reversion to the mean has never once in history NOT happened eventually. 'They say' what goes up must come down. It is absolutely true. Funds will weight heavily on specific factors, and sometimes it pays off. Small cap, growth, value, etc. *But*, the opposite will be true in the coming years when things balance out. That is a lot of blab. The *only* REAL way to track it is to use specific tickers. Not 'averages' or 'counts' of winners and losers. When using specific tickers, the S&P 500 beats over 98% of mutual funds over 20 years periods. This is a fact that has been tested against 'all professionally managed tickers'. The data is in 'The little book of common sense investing'. I'm definitely going off my memory but the 98% is 100% true. *And*, it's technically closer to 100% if we count what is known as the survivorship bias. Basically, the study in the book does NOT count funds that merged (bad performance typically merges with the winners to hide it) and that closed all together. For example, and I'm making these up because I don't have it in front of me. The 20 year period will include 1,000 tickers. Only a few (under 2%) will outperform the S&P 500 over that time, net of fees. The 1,000 tickers does NOT include the 1,500 that closed all together or merged during the 20 years. Most studies only show the ones that were there all along if that makes sense.
@@JeffTeeples What a wonderful, thoughtful explanation. I really appreciate the time and effort of your reply. Everything you said does make perfect sense and I consider my question thoroughly answered. Even answered with an included source. " The Little Book of Common Sense Investing" is next on my list. Although I've heard it recommended many times, it's never made it to my to read pile. I foresee the next audiobook in my future. Thanks again for the in depth response. Top tier, sir!
That's actually the sneaky advantage of a Roth. You can start it when you are 22 years old and take contributions tax and penalty free by 27 (: You are likely thinking of the traditional IRA. Even with that one you can make withdrawals anytime you would like for a 10% penalty. Not toooooo bad, but not ideal either.
If you do get hit by the proverbial bus before you turn 59.5, all that Roth money will continue to grow tax free for your heirs for at least 10 more years. Your kids would have to roll it to a brokerage account at 10 years. But it would be a tax free transaction for them.
Yes sir! There are a lot of 'optimal order' debates for which accounts to prioritize in investing. Especially for the 22% and 24% tax bracket (Roth vs traditional stuff). But one thing that I highly implore EVERYONE do is max a Roth IRA (assuming eligible with income limits) before investing in a taxable account. Even if they plan to retire early (heck, especially if they plan to retire early). I understand sometimes going taxable brokerage before more in a traditional 401k, and things like that, but a Roth should never be skipped for a taxable (at least very, very, very rarely).
Hey Tom. Thanks for the feedback. I like to throw in as much 'screen share' (with all the information) in each video. I try to get in as much as I can without getting too boring. The other clips you see are just to break up me being on the camera the entire time (during the non-stat / metric talk, usually the set up to get to the numbers).
Why don't you show people how to get out of the market (or shift those assets) when the market turns down? There just no reason to sit through those long drawdowns.
Hey Scott. That's just it. That is the point. Nobody knows when the market will do what. People that make moves statistically lose money. Trying to time the ups and downs and when to do what. People get the richest long-term by doing absolutely nothing. Again, this isn't my opinion. Tons of data out there. I'm trying to help save us from ourselves. The professionally managed funds fall short of the passively managed index following funds. The trick is that the market 'auto-rotates in real-time'. This is the hardest concept for most to learn. There is no predicting what is. You can have your share by holding the basket. I highly recommend 'The Little Book of Common Sense Investing' by Jack Bogle for more tests and stats. Even without considering survivorship bias, over 98% of actively managed funds fall short of the market over 20 year periods of time (this doesn't even include the funds that went poof). Reversion to the mean is real, and it can be had automatically with zero 'predictive moves'. There are some factors that work if you put A LOT of time into this stuff. But these solutions are not for the masses that don't want 'professionals' taking 25-75% of their portfolio value over a career (1% AUM + underperformance).
@@JeffTeeples Nobody knows when the market will do what, but trading is all about probability, and there are multiple available indicators that the market will probably go down. I will give you that the simple stop loss strategies do not improve raw returns, by themselves. But they DO improve risk-adjusted returns, and then improve overall returns if you shift your money into defensive sectors, bonds, treasuries, metals, etc. It doesn't have to be complicated-you can just rebalance your Bogle portfolio. Just do it on a market shift signal, not just the calendar. Of course, there are times that both stocks and bonds are down, so I'm not personally a fan of that either. You have to have other hedge options available to you besides just bonds. I'll stick to what I'm doing. Since I switched from passive funds to active investing 8 months ago, I'm running about double the S&P 500, with comparable drawdowns. Took me a while to develop the strategy, but now I only spend about an hour a month on it. Well worth it for me.
I'm smiling at this reply and genuinely wishing you well. I can assure you I am aware of nearly every investing strategy. 8 months doesn't even qualify as a small sample size, but I think it's cool you have outperformed the market in that time (I have as well by about 20% on my individual stocks). Do it for 19 years and 4 months longer and you could be a part of the 1% that *actually* beats the market (: The reversion to the mean takes many years / decades in certain markets. I can share a lot of valuable material with you if you would like to learn more. I don't say this condescending in any way. There is a lot to learn. It's addicting. I think you're well on your way.
@@JeffTeeples I acknowledge and appreciate that. The best time to plant a tree is 20 years ago. The next best time is today. 😎 I've been developing algos, and have been able to backtest several on the S&P 500 and NDX that prove out over decades. My next step is to figure out portfolio backtesting, so I'm planning to learn QuantConnect (unfortunately, Portfolio Visualizer or Portfolios Lab aren't sophisticated enough to handle my strategy, but I've at least used them to backtest my current allocation and some alternate configurations going back farther using proxies for some of the current selections). I can't go back 20 years, but I can at least do the best I can to backtest the strategy. FWIW my core long-term portfolio currently consists of 18 funds, all with
I wish I'd found your channel 15 years ago! I'm loving the Jeff Teeples train - thanks to your videos on SCHD, I was able to take advantage of that "juicy" bump up to $0.82/share. Cha-ching!
Thanks Eric! I appreciate your support of the channel. I wish I knew about the Jeff Teeples train 15 years ago too (: It was off the track for some major repairs at the time. The SCHD dividend was incredible. So much so that I put in a little extra time this weekend to push out a video mid-week. I will have a lot more time when my kids (2 and almost 4) go to school. For now I'm winging it week by week. But I couldn't resist making an SCHD video AND a HODL Factory video (Thursday and Sunday of this coming week).
In 2021 early left financial advisor, saved $$$ and I’m doing excellent! I’m a 58 year old woman. It’s actually exciting. Thanks for a great video
I love it! I'm glad to hear you are doing great and loving it. It really is exciting, and rewarding, to get the portfolio rocking without a financial advisor 'helping' you by stealing money in fees and investing in terrible assets for the 'kickback' at your expense. You made a great move!
Fidelity all the way!!!
I love that Fidelity has every account type available (or anything I've checked into anyway). The big knock for me is the website layout. E*Trade is so much cleaner it's wild. But Fidelity is highly rated and rightfully so. It is feature rich.
Great video!
Just bought 1000 shares of Splg. 400 shares of Schg and Ftec.
Will continue to DCA
Hey Tom. Thanks for watching and commenting. The S&P 500, or total US market, are so great over time. Keep on dollar cost averaging in (especially when it crashes hard) and we will win over time.
@@JeffTeeples Just enjoy your knowledgeable points on strategy etc.
Keep releasing content!!
Thanks Jeff! Keeping it simple has been key to the portfolio decisions I’ve made, and your videos have been invaluable. Keep reading…nothing wrong with you upstairs 😂
Haha, got a good chuckle from that. Thank you! (:
I love keeping it simple. VOO or VTI (or the other similar options) are a great way to do it! That was the core of my portfolio before getting a little more creative (but still sticking to passively managed ETFs of course).
I appreciate your extra support of this channel!
Great video Jeff. You're literally the reason I started anything. Been with you since you started geowing your channel. Keep up the good work. Need to upgrade to become a member.
I appreciate the kind words. I'm flattered that you have been here since the beginning. The support means a lot; this community has been great. If you join the membership that will be an amazing extra level of support. But either way you are helping the channel grow just be watching the videos and dropping comments.
I started a traditional 401k 22 years ago when I turned 21 so it's likely too late to roll that into a ROTH 401k without significant fees. So instead I started a Schwab account about 4 years ago and am focusing on SPYI and SCHD which is currently about 5% of net worth. I'm going to continue to focus on investing into those 2 ETF's moving forward so I can have that monthly income to help assist with living expenses as I move into my 50's. Thanks for the video.
Thanks for watching and for the feedback Leonard. I love the plan for supplementing your retirement income. In addition to that, you are also able to 'convert' some of your traditional IRA to a Roth IRA each year. You get to pick the exact amount you convert. It does add to your taxable income for that year, which is why it is best to do it over many years (instead of all at once, pushing you into the 37% bracket).
I really liked seeing the graph that includes DCA every month. It definitely makes those dips less scary
For sure. The dips are scary real-time. Seeing our portfolio go from $50,000 to $30,000 in a couple months is never fun. But we never lose any 'shares' of our ETFs. The dollars buy more shares during the drop. Eventually, the market hits all time highs again *per share*. I'm a fan of accumulating shares and chillin'. Eventually the math works out (for low-cost index tracking funds that is, of course there is long-term risk in many investments).
Thanks for another great video Jeff. I send your videos to my kiddos. I always tell them that I wish I had the knowledge that I have now at their age. They're in their 20s. If only I had that time on my side.
Thanks Christina! That is awesome that you send the videos to your kids. What a great mom (: I hope they get off to a better start than both of us did (:
Thanks Teeps! I feel like I have my base set now and am reinvesting my dividends in the places I want now. A little more risk here, a little more divies there. Keep up the good work helping everyone.
That is awesome! How is the portfolio doing lately? I love getting into more fine-tuned investing (as you know) with some other ETFs. Now it is still very passive, high-level, and simple. But VGT, QQQM, and SCHD are a great way to beat VOO most years with a balanced mix.
However, if I could only have one, it would be VOO in a heartbeat by a mile (: Well... Unless I was retired and needed cash. Then I see SCHD smiling from afar (:
My favorite thing about VOO is the 50/50'ish mix of value and growth (over the decades, I know we are a bit growth heavy currently, but the 'timing' will be 'perfect' as the underlying index shifts eventually. Takes out the guess work.
Hey Jeff, try making a few videos talking at regular speed. Iv been watching UA-cam personal finance videos for 4-5 years now. Iv learned a ton, but find myself gravitating towards people who just talk like they are chatting with their best friend.
Try it out my friend. Keep putting out videos and spreading the word!
Hey Zach. Thanks for watching the video and for the feedback. Sadly that is my regular speed, lol. I'm assuming you would like me to speak a little faster?
I love Fidelity! They keep trying to modernize their interface.
Fidelity is consistently the highest rated online broker from what I've seen over the years. You are not alone (:
Awesome basics that everyone should know and benefit from long-term. Keep up the the channel growth, you are a rock star.
Thanks Roy! I appreciate the kind words and the extra support you have given the channel. I like to mix in these videos about the basics. The goal is to help the masses.
I also like to get a little deeper in the weeds as well. I'm dropping 2 videos this week! Should be a great week (:
Another great video…very informative! I wished I had this video 30 years ago. I’ll share it with the younger folks. You mentioned that M1 automatically does rebalancing…does Charles Schwab have that option? Maybe consider a video explaining it?? Thanks!
That is a great question. I know Fidelity has the baskets. I think it has a long ways to go to compete with M1 Finance's pies. I'm not sure about Schwab.
I like to keep it simple. I went with E*Trade years ago because I think the interface is the cleanest by far. I have zero desire for fractional shares (with core holdings), and because E*Trade is a 'third party' in the investing world, it has all of the (good) investments available. Vanguard, Fidelity, and Schwab compete with each other directly. Didn't want to mess around with that (like VMFXX not being in Fidelity, for example).
I probably 'should' mess around with all of them, but I'm going to be honest, the OCD in me doesn't like the idea. Long way of saying I'm not sure (:
keep pumping out those financial informational videos Jeff!!!!
Will do Kevin. Thanks for watching and supporting the channel since the beginning.
Thank you, great entry point for newcomers and reminder for everyone to keep it simple!
Would love to get your input on USMC as well. It does have a higher expense ratio at 0.12% but I noticed its returns have been a couple of percentage points higher than other S&P 500 ETFs, in the past 5 years at least (and I guess another downside to it is that it has < 10 years history).
Hey Amir. Thank you for the kind words and for the question. USMC looks like a solid ETF. It piles a lot of money into strictly mega-caps, which isn't necessarily good or bad in a vacuum. I personally like large cap better than small cap, all things considered, which is why I go for VOO over VTI. But USMC is a little too concentrated on large cap for my liking. The sector balance is alright, but it only holds 43 companies. I don't think that will bode well when the reversion to the mean happens and small and mid start to dominate again for a while. VTI will slightly outperform VOO when this happens.
I'm not saying it is bad, I think it is solid. But it is a little too 'one-trick pony' for me. I like VOO better for similar reasons that I prefer VGT to XLK (more holdings, small and mid cap tech mixed in).
Got it, thanks Jeff! Yes that's a very good point about risk exposure coming from the limited number of holdings. I actually do hold XLG as well which is similar to XLK and USMC in that regard, so I'm due for some portfolio rebalancing to avoid this high mega cap concentration 😄 Thanks again!
I told someone last week they could invest in the entire U.S. stock market and they were in disbelief lol.
Right!? It's is a crazy concept at first. A single ticker that:
1) Buys everything in proportion to the business being done in the US (VOO or VTI)
2) Automatically 'times the market' perfectly based on what *actually* happens, no more 'rotation guesses'
3) Beats over 96% of professionals actively managed funds, net of fees, long-term (closer to 99% counting funds that merge or go poof
4) Does all of this by automatically buying one single ticker and chilling
If someone told me that in the beginning I would say BULL****!! (:
@@JeffTeeples lol ya pretty wild for sure.
Honestly, I didn’t know an investor could do that until early 2023. Didn’t do my research until then…wish I did it many years earlier!
One of my favorite tubers
I appreciate that! Thanks for dropping a comment and supporting the channel.
Great video going to buy Coca Cola and schd on Friday and aim to build over 1000 shares of each
Thank you for watching and commenting. I love it! Stay the course and keep building up that portfolio.
Rushed to watch! Love your inputs. Keep it up! Cheers from Brazil
Thank you for watching and supporting the channel. I appreciate it. Hoping for two new videos this week. Stay tuned (:
ThanX Jeff.... Great video.... Stay the course... Keep investing..... DCA and be patient.... GREAT advice for all investors. Thank you for your hard work and efforts on your videos and the information provided....!!! Have a safe & great July 4th weekend....
Thanks Lance! You too. Have a great 4th! It is a couple days before my birthday (I was due on the 4th according to the tales from my parents).
My wife and I were born 3 days apart (well, 5 years and 3 days, but who's counting). My (awesome) mom is watching our kids later this week. We get to go on a date together. I don't even know if we remember how that works at this point! (darn kids)
@@JeffTeeples how cool. Enjoy the weekend and peaceful time bring with each other. My wife and I are 13 yrs apart - same birthday - July 31st plus we made it our wedding anniversary too. This way she doesn’t have to remember much. Lol. Happy early birthday to both of you and enjoy the weekend. Be well.
Keep it simple, right Jeff. Great vid as per normal. Thanks.
Hey Ron. Definitely. I don't know how many times I heard 'keep it simple stupid' in my life, haha. One of my dad's go-to sayings.
I truly perfer
Splg over any other s&p etf
But with that said
Spmo is my foundation etf
SPLG is a great choice. I am impressed with SPMO as well. I have it on my list to dive into soon.
@@JeffTeeples spmo is like a growth fund with great downside capture.
2022 it lost 10%.
SPMO is my #1 as well. Take a look at GARP as a complement to it. Comparable performance over its existence (a little over 4 years), and not overly correlated. Unlike SPMO, it only has about 16% exposure to the Big 3 tech stocks, vs 31% for SPMO, so it's a little more diversified (only has >5% exposure to 3 stocks vs 7 for SPMO).
I replaced SPLG in my portfolio with GARP.
Great video as always!
Thanks Oldrin. Stay tuned for a couple videos dropping this week. I'm excited for both!
Great info Jeff, love all your videos very informative for someone like myself!!!❤
Thank you for the kind words Emily. I appreciate you taking the time to watch these videos. There will be plenty more to come.
Great simple but full of great knowledge video!
Thank you for watching and for the kind words. The good ole keep it simple strikes again!
Thanks for the weekly video.
Of course! It has been a busy weekend here, but I'm happy to announce that two videos will be dropping this week. Couple good ones, too (well, nerdy me thinks so).
Personally, I prefer a stable dividend growth ETF to the s&p500 for retirement income, such as SCHD or DGRO, as I dont want to sell off any of the principle I've accumulated over the decades so my heirs will have a notable inheritance (assuming they are worthy of it. Otherwise, it'll go to causes I deem worthy when I die). That being said, finding a low-cost S&P500 index fund is my go-to in a 401k.
Thank you for the comment. I'm with you 100% on the dividend growth ETFs over the 4% rule in retirement. I'll try to have a nice bit of VOO, VGT, and QQQM in there still IF the value allows it. But my priority will be heavily leaning to SCHD, maybe DGRO, and other income producing assets. I don't want to sell shares to produce my 3-5% per year. I like the 100% pass rate (:
Hi Jeff, thank you for another great video. I noticed in few of your comments that you against fructional shares. May I ask what is the reason behind it? I set up my weekly purchases same amount from different ETF's so it buys for me whole shares or fructioal if it is not enough to cover a whole share, is there anything wrong doing it?
Hey Idan. Fractional shares are great! It allows you to invest every dollar into the market. Fractional shares are objectively better than whole shares only.
This is definitely a 'me' thing. I just like the clean look of whole numbers. There are zero performance reasons to do it the way I do.
Awesome! Thank you Jeff.
Thanks!
Hey Brianna! You have been so incredibly generous to the channel. Thank you so much! Glad you liked the video.
Thanks and good information.
Thanks Anthony. I appreciate you watching and dropping a comment.
I have splg and SCHD in my account what would be a good ETF to complement those two?
Maybe QQQM or VGT or SCHG which are all growth based and will be more volatile but long term will increase your portfolio very nicely.
@@royvillagran638 thanks! I just started investing at 48yrs old. I got about 15 yrs of investing to go. I want to make the most of that time.
Roy nailed it. Normally I add some context, but this is perfect. Those are my 3 favorite growth ETFs to add to that base.
@@JeffTeeples awesome Schg stands out to me with the lowest expense ratio and I can get more shares at 100 dollars a share. Your thoughts on 33% each or lean heavier on splg?
SCHG is great! I like having a third of each. But any amount of SPLG will work fine because it is balanced between growth and value in and of itself. The important thing for me is to keep 'growth' (SCHG) and 'value' (SCHD) balanced. When you add them together, they roughly create a 'SPLG like mix'.
If you're younger, a growth tilt is common. Retired folks may go with a bit more value/dividends. I personally like the equal mix, but I'm also in my 40's so that makes sense (:
Contribute to Roth IRA and 401k in your younger, lower tax bracket years.
As you rise up up the tax brackets switch to pre tax IRA and 401k.
Let those grow yntil your late 30s/early 40s, and you might be able to reitre early by drawing from the Roths, and doing converting pre rax funds to Roth at a zero to low tax rate #FIREwheel
Amen! Music to my ears (: I always die a little inside when 12% and lower are focusing on pre-tax, or when 37% marginal tax folks are loading up on Roth over pre-tax.
Roth IRA...SCHD and JEPQ
Both great picks for creating cash-flow. Love it.
The hardest part for me is sticking to my investing plan. I’ve been investing for about 3 years now and I always seem to change at least once a year. So many UA-cam videos with so many strategies. I’m promising myself to stick with your modern 3 fund portfolio.🤞🏻
Haha, I feel you. I think it is great to stay open-minded and make small adjustments as we go. But sticking to the overall plan is important long-term. If we try to change it up too often we will be inevitably buying high and selling low by comparison. Usually the 'trend' will be to jump on the hot thing (like growth lately, for example).
E-trade does allow you to buy fractional shares of ETFs just not individual stocks
Thanks for watching. You got me excited, but unless this changed since Friday it isn't true. I tested just to be sure before I released the video. I never try to buy fractional shares, personally, because it drives me crazy. But I know a lot of people want this feature.
E*Trade does allow us to 'reinvest' dividends via DRIP. This can be done with stocks or ETFs. Perhaps this is what you were thinking of?
@@JeffTeeples you can do it. You have to go under the trading tab and click Automatic Investing(could also be labeled Automatically Invest, I don’t quite remember exactly) but once you click that in the drop down menu it’ll take you to a screen where you type in the ticker for the ETF you want(as you type suggestions will appear in the drop down menu), once you select the ETF you put in the dollar amount you want it to invest and how often(weekly or monthly) it has a minimum amount required of $25. E*Trade puts in its automatic investments on Tuesdays. If you selected monthly you pick which Tuesday of the month. Hope that helps. I’ve been investing in SPY using this exact method for months now as I wanted SPY as the base for my portfolio and I couldn’t afford a full share. You’ll know if you can do it with a stock because when you search the stock you’ll see Auto-invest eligible at the top of the stock’s info page. You will see this if you search SPY for example.
Very cool! I had no idea E*Trade had this feature. I won't use it because I'm weird and I can't stand owning fractional shares, haha.
Does the automatic investing feature have any fees attached? Or is it 100% fee free just as if I bought the ETF myself?
@@JeffTeeples The only fee is the fee of the etf itself. You know the same one every etf has, but E*Trade doesn’t charge you anything.
Great info. Much appreciated!
Nice video, as usual. You know, I always hear "the S&P ETF's out perform 90% Of assest managers...". I'm pretty sure this is a Buffet quote. Has anyone seen any data to back that up? It's not that I don't believe it, I just like to confirm what I hear. Trust but verify. Where could one go to find the data that is used to support this statement?
I currently have both types. I can say that since I have began investing on my own that the managed accounts trail the S&P500! Not to mention the fees for a managed account.
Hey Bryan. That is a great question. There is a ton of data to back it up. 90% is a very safe estimate that will 'never be wrong' over a long period of time. The 'Little book of common sense investing' has more concrete data about this. Many other books do as well, unfortunately they all run together at this point for me lol.
You will find a lot of sources out there that will show different data points. The only way to *really* compare mutual funds and ETFs to the S&P 500 is to follow through specific tickers. Not just 'this many beat it this year and this many fell short'. What happens is statistically speaking, funds that beat the S&P 500 have a MUCH greater chance of losing the following year. Funds that fall short have a MUCH greater chance of beating the S&P 500 the following year.
This is because the reversion to the mean has never once in history NOT happened eventually. 'They say' what goes up must come down. It is absolutely true. Funds will weight heavily on specific factors, and sometimes it pays off. Small cap, growth, value, etc. *But*, the opposite will be true in the coming years when things balance out.
That is a lot of blab. The *only* REAL way to track it is to use specific tickers. Not 'averages' or 'counts' of winners and losers. When using specific tickers, the S&P 500 beats over 98% of mutual funds over 20 years periods. This is a fact that has been tested against 'all professionally managed tickers'. The data is in 'The little book of common sense investing'. I'm definitely going off my memory but the 98% is 100% true.
*And*, it's technically closer to 100% if we count what is known as the survivorship bias. Basically, the study in the book does NOT count funds that merged (bad performance typically merges with the winners to hide it) and that closed all together.
For example, and I'm making these up because I don't have it in front of me. The 20 year period will include 1,000 tickers. Only a few (under 2%) will outperform the S&P 500 over that time, net of fees. The 1,000 tickers does NOT include the 1,500 that closed all together or merged during the 20 years. Most studies only show the ones that were there all along if that makes sense.
@@JeffTeeples What a wonderful, thoughtful explanation. I really appreciate the time and effort of your reply. Everything you said does make perfect sense and I consider my question thoroughly answered. Even answered with an included source. " The Little Book of Common Sense Investing" is next on my list. Although I've heard it recommended many times, it's never made it to my to read pile. I foresee the next audiobook in my future.
Thanks again for the in depth response. Top tier, sir!
Problem with using roth retirement is you may not make it to 59. Nothing is guaranteed.
That's actually the sneaky advantage of a Roth. You can start it when you are 22 years old and take contributions tax and penalty free by 27 (: You are likely thinking of the traditional IRA. Even with that one you can make withdrawals anytime you would like for a 10% penalty. Not toooooo bad, but not ideal either.
If you do get hit by the proverbial bus before you turn 59.5, all that Roth money will continue to grow tax free for your heirs for at least 10 more years.
Your kids would have to roll it to a brokerage account at 10 years. But it would be a tax free transaction for them.
Yes sir! There are a lot of 'optimal order' debates for which accounts to prioritize in investing. Especially for the 22% and 24% tax bracket (Roth vs traditional stuff).
But one thing that I highly implore EVERYONE do is max a Roth IRA (assuming eligible with income limits) before investing in a taxable account. Even if they plan to retire early (heck, especially if they plan to retire early).
I understand sometimes going taxable brokerage before more in a traditional 401k, and things like that, but a Roth should never be skipped for a taxable (at least very, very, very rarely).
Jeff - I would love to see much less of the stock video clips and more charts, graphs and text of what you're discussing in your videos.
Hey Tom. Thanks for the feedback. I like to throw in as much 'screen share' (with all the information) in each video. I try to get in as much as I can without getting too boring. The other clips you see are just to break up me being on the camera the entire time (during the non-stat / metric talk, usually the set up to get to the numbers).
Why don't you show people how to get out of the market (or shift those assets) when the market turns down? There just no reason to sit through those long drawdowns.
Hey Scott. That's just it. That is the point. Nobody knows when the market will do what. People that make moves statistically lose money. Trying to time the ups and downs and when to do what. People get the richest long-term by doing absolutely nothing. Again, this isn't my opinion. Tons of data out there. I'm trying to help save us from ourselves.
The professionally managed funds fall short of the passively managed index following funds. The trick is that the market 'auto-rotates in real-time'. This is the hardest concept for most to learn. There is no predicting what is. You can have your share by holding the basket.
I highly recommend 'The Little Book of Common Sense Investing' by Jack Bogle for more tests and stats. Even without considering survivorship bias, over 98% of actively managed funds fall short of the market over 20 year periods of time (this doesn't even include the funds that went poof). Reversion to the mean is real, and it can be had automatically with zero 'predictive moves'.
There are some factors that work if you put A LOT of time into this stuff. But these solutions are not for the masses that don't want 'professionals' taking 25-75% of their portfolio value over a career (1% AUM + underperformance).
@@JeffTeeples Nobody knows when the market will do what, but trading is all about probability, and there are multiple available indicators that the market will probably go down.
I will give you that the simple stop loss strategies do not improve raw returns, by themselves. But they DO improve risk-adjusted returns, and then improve overall returns if you shift your money into defensive sectors, bonds, treasuries, metals, etc. It doesn't have to be complicated-you can just rebalance your Bogle portfolio. Just do it on a market shift signal, not just the calendar. Of course, there are times that both stocks and bonds are down, so I'm not personally a fan of that either. You have to have other hedge options available to you besides just bonds.
I'll stick to what I'm doing. Since I switched from passive funds to active investing 8 months ago, I'm running about double the S&P 500, with comparable drawdowns. Took me a while to develop the strategy, but now I only spend about an hour a month on it. Well worth it for me.
The highest performing portfolios belong to people who have long since passed.
I'm smiling at this reply and genuinely wishing you well. I can assure you I am aware of nearly every investing strategy.
8 months doesn't even qualify as a small sample size, but I think it's cool you have outperformed the market in that time (I have as well by about 20% on my individual stocks). Do it for 19 years and 4 months longer and you could be a part of the 1% that *actually* beats the market (:
The reversion to the mean takes many years / decades in certain markets. I can share a lot of valuable material with you if you would like to learn more. I don't say this condescending in any way. There is a lot to learn. It's addicting. I think you're well on your way.
@@JeffTeeples I acknowledge and appreciate that. The best time to plant a tree is 20 years ago. The next best time is today. 😎
I've been developing algos, and have been able to backtest several on the S&P 500 and NDX that prove out over decades. My next step is to figure out portfolio backtesting, so I'm planning to learn QuantConnect (unfortunately, Portfolio Visualizer or Portfolios Lab aren't sophisticated enough to handle my strategy, but I've at least used them to backtest my current allocation and some alternate configurations going back farther using proxies for some of the current selections). I can't go back 20 years, but I can at least do the best I can to backtest the strategy.
FWIW my core long-term portfolio currently consists of 18 funds, all with
I wish I'd found your channel 15 years ago! I'm loving the Jeff Teeples train - thanks to your videos on SCHD, I was able to take advantage of that "juicy" bump up to $0.82/share. Cha-ching!
Thanks Eric! I appreciate your support of the channel. I wish I knew about the Jeff Teeples train 15 years ago too (: It was off the track for some major repairs at the time.
The SCHD dividend was incredible. So much so that I put in a little extra time this weekend to push out a video mid-week. I will have a lot more time when my kids (2 and almost 4) go to school. For now I'm winging it week by week. But I couldn't resist making an SCHD video AND a HODL Factory video (Thursday and Sunday of this coming week).