Should You Allocate All Your Retirement Funds to the S&P 500?

Many younger investors advocate for an all-equity allocation at younger ages. Is this a wise idea or is there value to being diversified even at a young age?

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[Woopigmavs]

I think this is great advice for the vast majority of people. You have to remember that if you’re here watching this video in the first place, then you almost certainly fall into the small group of society that is very financially literate and hands on. Everyone else is getting their financial advice from TikTok, family members, etc., or not at all.

Personally, I enjoy the stress free nature of target date funds. However, I do put about 25% into the S&P to effectively reduce the international allocation of the target fund.

[jbs]

To me (as a 27 year old), just buying the S&P with an index fund with razor thin margins makes the most sense over the long term. I personally use SWPPX for 100% of my funds.

Target funds take more margin, and the vast majority of their growth are from the S&P 500 funds anyhow. Its just cutting out the middle man and if you invest early and often, and believe in the overall success in the US economy, you really can't go wrong with simple S&P.

[abreh]

Total stock market is my practice. My issue with target retirement is the large portion it allocates to international. I understand the glide path, snd like he idea, but if the target retirement funds were not so heavy on international I would be more on board.

[July..]

Not a bad idea the cost on a S&P index fund are usually very low. I have known a few people that put everything in the S&P and never looked at it for 40 years and are very happy with the results. The old saying go home with the girl that brought you applies to the S&P as well. 👍

[jacobduplanty]

This is currently my status: I’m 25 & am anywhere between 35/40% VOO & VUG, with the remaining 20% VTI. I used to check my account several times a day, now I only check when I buy more shares. It might not be the “best” way to invest, but I’m going to match the market & can diversity later on. Seeing the S&P down 30% is MUCH easier to swallow than seeing individual stocks down that much.

[emoney]

Yeah... I'm doing primarily large cap index. I'll let abound wealth management talk me into changing it when I hit critical mass.

[imdoc]

Warren Buffett portfolio. 90% s&p 500 index fund and 10% short term treasury bonds. Easy!

[Thomas-setb]

Why bet against the market? 86% of all funds don’t beat the S&P so why would I invest in anything else? Think like buffet!!

[Omikoshi]

I like the money guys but the easy answer is:
1. S&P500 when you’re young
2. Target date fund when you’re older

They can’t recommend this because they make their bacon from the perceived complexity.

[larrytruslow]

I just have a problem with the large percentage allocated to international in target date funds...Fidelity and Vanguard allocate 40% to international. Over the short and long term, international has significantly underperformed the US. This lag will impact reaching long-term goals...like retirement. Bogle and Buffett both see little to no reason to invest internationally, since the S&P 500 garners nearly half its revenues overseas.

[coreyhj]

97% of my ROTH is in the S&P500. VOO, VNQ, & BRK-B

[docmartin]

I could use some help understanding how a target date fund is useful in this sense. My understanding of a target date fund is that each individual share is divided amongst the individual asset classes. If that is the case then it seems to lose the advantage of a diversified portfolio which has the same asset classes percentage wise, but the different classes are sellable individually. This means that if the S&P is down I don't have to sell those and can wait for them to recover, and instead I can sell the bond portion of the portfolio which has likely suffered less than the S&P. But if I need to sell to obtain cash with a target date fund, I still have to sell when the S&P is down because the S&P is wrapped unto each share. Am I thinking about this incorrectly?

[jacobseymour]

The problem with my 401k plan is that our target retirement funds have a 0.75% expense ratio (we only have the active version, not the index version), and a 40% allocation to international. I'd much rather have everything in a cheap S&P500 index fund, than an expensive fund with too much international exposure that I believe will (mostly) continue to underperform over the long term.

[TheSwartsShow]

Should you max out Roth before putting money into anything else?

[alexgonzalez-keoe]

Should i transger all my target fund 2045 to the sp500. Im 40 retiring at 62 im debating

[kckuc]

Yes definitely, this should of been a real easy one, if your young and have tons of time, it definitely is the S&P index

[david]

You nailed it at 3:30 in. Hit it with that message next time. You are the greatest source I have gound for the 'next level' of of financial dicipline past the initial information gathering process

Brian, Bo, you rock.

Time in the market, not timing the market. Clairify the message.

[mrjuvy]

Why not put it in BRK B, it beats the S&P and does not have big down turns in tough times.

[rickdunn]

@Money Guy can you provide some info./generic advice for US Military starting out ...using the TSP?

[jesssc]

Qqq + SCHD vs VOO ; which one would you pick?