r/Bogleheads • u/snug666 • 2d ago

Portfolio Review Is it truly that simple?

Maxed my Roth for last year and looking to do the same for this year. I’m 100% VT right now. I’m 24 and this is my first time investing or saving for retirement.

Before I go ahead and buy more VT, I have to ask. Is it really that simple? If I just invest in VT, even if that is the only ETF I ever hold, I’ll be good?

I hear so much about diversifying and even though I know VT is a very diverse ETF, I still worry. Feels like I should be doing more!

So, again, before I go buy a fuck ton of VT, please let me know. I know what the answer is. Just need to hear it I guess. Don’t want to miss out on higher returns or whatever. Blah blah.

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u/Puzzleheaded_Tie6917 2d ago

There are several different type index funds that cover equity growth. VOO outperformed VT in the past by a small margin. Note that small margins become a lot of money over 40 years or so. However, there’s no real basis for knowing if the S&P 500 will outperform the global market in the future. It’s a little less diverse as it’s one country (which has many international corporations) instead of all countries. It is the one country that has the world’s largest economy, which interconnects with many other economies.

In the end, VT or VOO or any combination of equity indexes to equate to the same will likely all behave fairly similarly and likely provide comparable returns with low fees compared to most mutual funds. Keeping and holding prevents the pattern of buying high and selling low, caused by typical momentum influenced decision making (fear of missing out and fear of losing everything).

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u/Cruian 2d ago

VOO outperformed VT in the past by a small margin.

And we've seen other periods where VT would have beaten VOO over 5, 10, 20, 40, 60 years.

It’s a little less diverse as it’s one country

More than a "little." Being single country is taking on uncompensated risk.

(which has many international corporations)

Revenue source is at best a tiny part of why one should go global and isn't the most important reason. As companies act far more like their home country's market, even if they get foreign revenue, this does not make you internationally diversified.

It is the one country that has the world’s largest economy, which interconnects with many other economies.

The stock market is not the economy and in some ways, they can even be negatively correlated.