Part 11 – Comparing Portfolios to find the winner and see the power of diversification in action! If large-cap stocks do poorly, as they have at various times in the past, the small weighting of small-cap stocks isn’t enough to make up for the difference. Both of those factors have historically provided premium returns. VFIAX vs. VOO: The Basics. VTSAX was outperformed by bonds and T-bills from 2000-09. We may also accept advertising and sponsorships from commercial businesses or receive other forms of advertising compensation. There are two ways of viewing this statement: First, the HUGE positive of MCW index funds is that the market’s return is better than MOST mutual funds’ returns and definitely better than picking stocks. However, MCW index funds blend the value and growth factors together with everything that falls in the middle into one fund completely eliminating any premium return. If you're already a Vanguard client: Call 800-888-3751. VFIAX basically = VTSAX, though I do think if you were to hold just one of these funds it should be VTSAX! VTSAX is one of the largest index funds in the world. Related reading: How Index Funds Self-Cleanse to Reduce Loss. What if I tell you that a portfolio of diversified domestic (U.S.) stock index funds of different market-cap weights has a higher expected long-term return than VTSAX? VFIAX’s Admiral Shares require more capital but have lower fees. I'm relatively new to investing and I recently opened a Roth IRA with Vanguard and purchased the VFIAX mutual fund. Simple! The content on Keep Inve$ting Simple, Stupid is for educational and motivational purposes only and should not be considered individualized personal finance or investment advice. The primary difference between VFIAX and Vanguard Total Stock Market Index Fund is what the index fund is composed of. The top 10 holdings for VTSAX vs VFIAX are the same stocks but in different percentages. Also, check out Morningstar and compare VTSAX vs. VSMAX – the large-cap outperformance didn’t begin until ~2017. This isn’t the case when you hold multiple funds, however. If you feel you need specific individualized advice I recommend finding a fee-only Certified Financial Planner (CFP) or tax professional (CPA) to provide such individualized advice. Despite also holding the smallest 3,000 stocks, VTSAX is a large-cap blend index fund. Finally, what if I tell you that it will take a whopping 2 additional minutes of your life to do this? You aren’t protected (diversified) from the whims of the stock market. Because no one who’s anyone cares who I am! In sharing numerous personal anecdotes of how having “FU” money opened up his life to freedom from work at various points, he shares the importance of having money beyond an emergency fund to live on for a prolonged time to afford you the freedom to pursue what you want to do. I have chosen to invest in VTSAX instead of VFIAX for the additional diversification and exposure to small- and mid-capitalization stocks as well as the large-cap stocks, but either choice would serve you just fine. You must understand that the awesome returns large-cap growth stocks had this past decade were an anomaly, not the norm! Archived. VTSAX and VFIAX are very similar investments. Instead of thinking of holding VTSAX as if you own 3,551 stocks you should view it as if you hold 1 market. Because it’s 100% stocks. This means that whatever happens to the stock market happens to VTSAX, which then happens to you. Or put another way, VTSAX is a collection of many stocks (more on that later) that track the American stock market as a whole. The diversified portfolio also had the highest risk-adjusted returns (higher Sharpe ratio) and better downside risk in the bear markets (higher Sortino ratio). It’s merely recognizing the fact that VTSAX is a large-cap blend index fund, as it’s style-box shows it is. First things first. A lot…, Part 6 – The love affair with VTSAX is a tale of two very different decades. FXAIX vs VFIAX. 9 9. Find the latest Vanguard 500 Index Fd Admiral S (VFIAX) stock quote, history, news and other vital information to help you with your stock trading and investing. Below is the comparison between VTSAX and VFIAX. The biggest 10 stocks in VTSAX account for 22.4% of the entire fund! If you’re looking for a low fee index fund that tracks the S&P 500, then VFIAX is a great choice and will accomplish that goal. Why? Check out this PortfolioCharts article. How is that not diversified? While the largest companies dominate the MCW indexes it’s the smaller stocks that have the highest historical and expected future returns. When the market rises 12%, VTSAX rises by 12%. FXAIX vs VFIAX. But as you read through the posts in this series you’ll see two trends appear: By breaking down VTSAX into its components of small-, mid-, and large-cap stock index funds you are able to exploit the higher expected returns we covered above. Part 9 – The Ultimate KI$$ Portfolio – a summary of the results of the first 8 parts and identifying the 4 funds that made it to the final portfolio. When certain sectors of the stock market are overpriced you pay for it because they must be held at their *current* market-cap weighting. Beating VTSAX, Part 11 - Comparing Portfolios | KEEP INVESTING $IMPLE, $TUPID! Vanguard Total Stock Market Index Fund (VTSAX) provides investors with exposure to the entire U.S. equity market.

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