VOO and Chill | Is An S&P 500 Index Fund Portfolio a Smart Idea?

You'll often hear the phrase VOO and chill or sometimes VTI and chill. VOO is the ticker to Vanguard's S&P 500 index ETF (VTI is Vanguards total U.S. market ETF). The idea is to invest all of your money in the S&P 500 (or perhaps the total U.S. market) and just relax.

After my video showing my 2021 portfolio tracked the performance of the S&P 500 (more or less), many asked why I bothered with multiple asset classes and individual stocks. Why not just VOO and chill?

This video explains why, and more importantly, walks through some concepts that might help you decide what's best for your portfolio.

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#voo #vooandchill #robberger

ABOUT ME

While still working as a trial attorney in the securities field, I started writing about personal finance and investing In 2007. In 2013 I started the Doughroller Money Podcast, which has been downloaded millions of times. Today I'm the Deputy Editor of Forbes Advisor, managing a growing team of editors and writers that produce content to help readers make the most of their money.

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DISCLAIMER: I am not a financial adviser. These videos are for educational purposes only. Investing of any kind involves risk. Your investment and other financial decisions are solely your responsibility. It is imperative that you conduct your own research and seek professional advice as necessary. I am merely sharing my opinions.

AFFILIATE DISCLOSURE: Some of the links on this channel are affiliate links, meaning at no cost to you I earn a commission if you click through and make a purchase and/or subscribe. However, I only recommend products or services that (1) I believe in and (2) would recommend to my own mom.

[jgg]

The top 500 US companies have significant international exposure, more so today than ever before. We can't look back to the 80's and use performance then to dictate future performance behavior, b/c we behaved differently back then too.

[MikeRepluk]

in my opinion, the top 500 US companies have also gone international thanks to globalization. Companies such as google, apple, Johnson etc are well beyond just the US market

[rjlane]

It would be interesting to see the benefits of having only 1 fund (like VOO) where there was never a tax from rebalancing

[wd]

The more scenarios I see of what to invest in, the more I think that I should consider VTSAX for my equity portion and be done with it. I like to think I can do better (with regards to overall returns), but I just don't know. I haven't done better so far.

[diydarth]

S&P companies are themselves international. They also buy small cap companies to extract their value. Which is why s&p provides best risk vs reward ratio.

[davidmyre]

VTWAX - 63% is equivalent to VTSAX but you get some additional global exposure

[mrderek]

I would love to see the same style video but just with VTI.

[auricgoldfinger]

You are an absolute machine. Almost an 8 hour workday for you. I hold 15% individual stocks 65% VFIAX for equity exposure. I wish that I never had the individual stocks, most with very large CG

[ph]

A professional markets expert I saw on an interview recently had a comment that I hadn't heard before when was asked some question related to the past x number of years about the market performance...He said something to the effect that the markets have ZERO memory of anything that happened in the past, they focus on what is the future...Made sense. Yeah, Bogle and Buffett have said the easiest thing to do is invest over time in the index funds of the S&P or total US stock market and you'll be fine at the end of the day, and for most people that's best. But, like you said, it's up to each individual's preferences, opinions, and risk tolerances...Good video, Rob! Happy New Year to you.

[davidtodd]

If I were as educated and had the background of Rob I would diversify more. Since I'm not though, VFIAX and VTSAX are my core and only holdings in my Roth and 401K. Excellent video for thought though.

[billtraylor]

I'm hoping you have a new video with recommendations or options of index investing in light of how dismal the markets have been since early 2022

[Dr.Dumpnpump]

Direct, clear and valuable insight. Thank you. Subscribed.

[marshallhosel]

I must say, I really enjoyed how you approached this. Very well done. I learned a lot…and I’m not an investing rookie.

[BryanColliver]

with all the biggest company's in the USA now getting a bigger and bigger % of there profits from international growth I have no problem with just holding VTI with 4160 holdings gives you a bit of everything micro small mid and large all in one place. thank you for the video

[DanTheMentor]

I’ve been slowly adjusting out of international and adding more small/mid cap. I’m probably allocated at 60% large, 30 mid/small, and 10 international, but this video has me rethinking maybe adding more international.

[erikdunkelberger]

On the chart, the Small Cap separated heavily from the Large cap back in the first years of the chart. They both continue to grow at seemingly the same rate. Can someone explain that? Edit: What I’m getting at is it seems the major difference in portfolio value is due to the separation in the 70s. If you did a lump sum from 1985-present it would be about the same growth. So the way to get these results would be to predict a separation of huge proportions between the Small Caps and the Large Caps.

[kona]

Im 52 with a 91% equity portfolio. 90% of that is VFIAX. I feel pretty good about it.

[XRP]

VTI all day long !! Best vanguard fund for long term horizon.

[osu]

I watched this again and used VSIAX specifically against VTSAX instead of the generic small cap value and large cap. The period was restricted to a 10yr period of 2012 to 2022. VTSAX outperformed the VSIAX in return by $16k and CAGR by a percent or so.

[drmitofit]

The traditional calculation is that one can expect the S&P to gain 10% per year on average, but for the last 10 years it's been 15%. I went 100% S&P with my 401k and employer matching in 1995, kept contributing during the 2009 financial crisis since I didn't have a large amount accumulated by then, rode out every dip, and by staying in for decades, I have long term exponential growth that is outperforming all of my coworkers. Another reason why I like it is that the S&P is analyzed and closely tracked on Fox Business News. I also feel that the large cap companies are better equipped at riding out volatility and supply chain disruptions than small companies that have fewer resources and fewer options. A negative is that the big tech companies have bigger and bigger representation in the S&P so it's becoming the NASDAQ. Not terrible though since the future is in Tech.