Personal Investments • Is it Too Late to Invest in VTI?

I think all I am saying I feel more comfortable with more diversification. That's why mutual funds started. To see one have 30% in one sector; does not meet my own guide for diversification. Its fine if it meets your standard, pile more money into it. To each his own. Its just not hard to diversify with another fund with a much different allocation.

it's not hard, but that doesn't mean it's wise.

if you're going to tilt away from the market you have to believe you know something the market doesn't. And it's been said that to beat the market you have to be different but also right. Plenty of people are different from the market, but they still underperform. Will you be able to stick with a strategy LONG TERM that underperforms the market. That's what you need to ask yourself. Investor know thyself.

Me think you doth protest too much because you are also concerned: The top 10 stocks in VTI and other indexes ten years ago used to be mid-20% of the index funds, and now the top 7 are 31% in VTI. You keep blindly citing the "market" as if tht title to the ETF or fund should give you comfort, with no need to study the portfolio of funds you choose. They call it the total market index right? That means I have good diversification, right? Nope.
From Morningstar:
In certain markets the representative index may be constructed from a limited number of constituents, and those with high market capitalizations may become so large that they wind up monopolizing the index. In such instances a market-cap-weighted portfolio may actually be one of the least diversified choices available.

There's nothing to study if you accept the collective wisdom of the crowd. Perhaps you don't accept that wisdom. That's your choice. But if you don't accept the collective wisdom of the hundreds of millions of participants you do have to ask yourself if you know something they don't know or not. And also what if you are wrong?

The composition of the market has changed over time and will continue to change and yet the market as a whole has provided good returns for investors willing to just simply own the market. There's nothing you need to do except buy and hold. It's the holding part that I find people are unable or unwilling to do because they continually come up with rationalizations and justifications for why they need to do something different. This has been and will continue to be a mistake.

Statistics: Posted by arcticpineapplecorp. — Thu Feb 22, 2024 1:35 pm — Replies 99 — Views 11861

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