One thing that also attracts people (specially in EU/UK) to SNP500 funds is relatively lower fees compared to e.g. diversified "World" and especially "All World" indices. Did your analysis include total returns (minus the fees)?
I've had a well diversified portfolio for decades. I live in the US and I admit it's focused heavily on US stocks. But I've got a fair chunk spread across several international funds as well. They've all done well for me. Though I admit the S&P has been on a tear these last few years. I didn't start out with an oversized investment in it, but I ended up with one. Though as part of rebalancing now that I'm retired I've pulled some of that money out of equities across the board and into good old boring bonds. I'd have rebalanced and taken some of that money out of the S&P in any case though. These days the S&P 500 is really the S&P 7 and while the returns have been great it's also volatile as you point out.
As an investment enthusiast, I often wonder how top-level investors are able to become millionaires through investing. I have a significant amount of capital to start with, but I'm unsure about the strategies and direction I should take to help me generate substantial profits like some people are this season.
I’m not in a position to offer financial advice, but given the significant amount of capital you're working with, it would be wise to consult a financial advisor who can guide you in developing a strategy tailored to your goals and risk tolerance.
10:32 the 10 year return distribution would be very useful if it included reinvesting dividends. Could this be updated, please so it accurately compares the UK market?
Would be quite helpful if the worst/best case 10yr scenario was extended to also show for 20yr, 30yr which is likely more common timeframe for many of us, especially considering in many countries you pay less capital gains tax after longer periods (and would likely aim to hold for that long)
11:16 I totally agree that a global index is better, but you do have to be careful as most ‘global’ indices are 60~70% weighted in the US market. So you you’re only actually diversifying a third into ex-US.
6:21 doesn't the thing you just said before about being accurate on the date ranges you're comparing apply here too? if you're comparing a sliding 10 year window but snapping each of them to the start of the year aren't you over biasing towards those dates?
That's a lot of green in this video for some reason...I was just in Westminster Abbey and their seasonal altar hanging - or whatever it is - color is also green for the moment... Hmmm
What a great video. I sometimes worry that, if there was a big crash in the S&P 500 (above 20%), would the other stock markets worldwide follow suit? It will also be interesting to see what happens with UK stock markets, given the proposed pension fund changes. We live in interesting times.
Most likely yes - in 2007 crash for example American took the world's equities down with it. Same in the 2000 crash. But this makes total sense because US equities are like 70% of global equities. So when they get hit every global fund takes a sh*t as well.
This is so interesting and helpful. I’ve been wondering why your main portfolio is a total stock market fund and I guess this is why. Your research determined that even with your investing background you decided you couldn’t outperform the market by picking stocks!
@Pensioncraft I've been trying to do this for a long time but struggling to find historic performance (greater than the last 10 years) as a UK based investor where have you found is a useful source of historic annual performance data?
Hello sir, i have so many of my company stocks from options, espp offers. Do you have a video or strategy on how to get out of single stock concentration situation? Thank you for your videos.
The S&P 500 should be in ‘buy-the-dip’ territory, as leading indicators for profits continue to improve. I believe the S&P500 will go over 6000 eventually. Making Investors like me believe that “Santa has come early” to markets to find out the best additions to a $500K portfolio to boost performance.
I think you're just better off with majority investment in S&P500 and uprising equities cos they always outperform. Alternatively speaking to a certified market strategist can help with pointers on which to acquire
Great insight. When S&P 500 is running so hot, it's always a good time to think about de-risking. I'll till more towards equal weight S&P 500 index (RSP), small cap value (AVUV), developed world ex-US (VEA) and 10-year treasury is about 4.5% and it's getting interesting to add some (TLT).
I looked up for an ex-USA ETF / developed market ETF like ACWX and VEA, the yearly return of the past 10 years 3.70% and 5.46%, these barely beat even the inflation rate in the past 10 years.... if US market is gonna to crash soon and underperform for the next, like 10 years, the whole world is gonna to suffer, possibly and particularly its allies. The question is, should I instead by a particular country / region index ETF instead of buying these ex-US ETF / developed market ETF that buying every stock in the world?
Past performance is no guarantee of future returns. US small cap had its glorious days in the past century but have been loosing a lot in the past 20 years.
Note that in the 1970s and '80s many people had defined benefit pension, and the flow of cash going into the stock market was much less. Now the situation is very different - billions are pumping into the US stock market every day from private pension funds.
@@muffemod Any evidence of this? Withdrawals are gradual - retirees typically don't withdraw hundreds of thousands at once! And the US stock market is invested in by people worldwide, not just the US.
@@muffemod It's always been that way. There were only 4 investments the pension plans invested in, Equities, Bonds, Real Estate (whether direct, REIT's, or mortgages), and Treasuries. The pensions were never just "free money". They were generally separately managed liabilities handled by different companies, whether it was outsourced or in house. So nothing really changed anyways. The only difference is that instead of the money being put into pensions, which would then be invested into the market and other investments, they are now being put into 401K's and then being put into managed funds by the big 3 (vanguard, fidelity, schwab). So essentially there is no difference, except that companies now pay less for retiree benefits.
For me its Do I have a cash fund to tide me over on the drops? Are the drops buying opportinities? and it will always come back so dont panic . So its a hard sell to promote other funds . for my money
Your cash fund that tides you over on the drops may have to last quite a few years. See minute 2:20 (6 year drop) or the drop between the early 70's and 1988. Would your cash fund last 15 years? I suspect most people's cash fund would last 1-4 years max.
@@grantedwards7357 i think 3 years is enough to outlast all but the worst of the worst if the fund is big enough in retirment i wouldnt crystallise everything just what i need after 3 years to get by for a year or so rinse/ repeat wait for the sun it will come back
What I think your analysis doesn't address is the situation, which is the most common, of DCA during medium to long period of time. If that is done, the "unlucky" situation which I believe comes from investing that bulk of money at uncommonly overvalued point in time, say you invest everything you have just before doc com bubble burst, will be completely mitigated. Meaning, DCA into S&P will still prove to be the best strategy over all, "by far". :) Best!
I don’t invest my money in the S&P500 because of past performance. I invest in the S&P500 because 1)it’s better than leaving it to erode due to inflation. 2) leaving it in my bank account where I’ll be tempted to spend it. 3) All the top companies are listed on the US
@@Hardspace1979 personally it’s the only fund that makes sense to me. I sure as hell won’t invest in the FTSE, that’s equivalent of me lighting my money on fire. And I find that America love their stock market
I looked into ex-US etf, like VXUS, 5-yr return is 5.78%, 10-yr return is 4.99% And then I compare to the US inflation rate, long-term average (1990-2023) at around 2.5%, it barely beat inflation and surely underperform to many markets including US stock market.
I do have some questions in my head now, what if the US market is crashing on 2025, economy of the US is bad and the US stock market will underperform for the next 10 years, just like you said it did happened before in 1969-88 & 2000-10, buying the small cap ETF/ equal weight S&P ETF still would not work since the whole US market would be bad, it might just be slightly better than VOO/SPY at first when it comes to an economical crisis, am I correct or did I misunderstood sth? For a small cap ETF, in my opinion, it might hit harder during economic recessions due to their higher sensitivity to economic cycles, less access to capital, and potentially weaker balance sheets. If the U.S. economy is in a prolonged slump, small-cap ETFs might not only fail to outperform but could actually underperform larger, more stable companies.
When the US stops out performing I'll shift my US investments. Until then I'm sticking with it. A lot of global funds have 60% or 70% US so it's difficult to get away from.
Workplace pensions often have limited options. Best I could find with a low ish fee is a World Ex UK one but that’s 70% US and a large and mega cap one. There’s a small cap option which isn’t as cheap I could go into for a bit at some point.
Me too, the best historical performer with my provider is the Shariah Compliant Dow Jones Titans 100, it’s quite concentrated and not the cheapest but it’s the only one I can find that invests entirely in quality US stocks with excellent past performance.
My target retirement fund in my 401(k) had poor returns compared to the S&P 500. I switched everything to the S&P 500, but I regret not doing it earlier. What are the best options for investing $200k for reliable cash flow?
you need a certified financial expert straight up! personally, I invest in ETF's and also love investing in individual stocks. yes it’s riskier but am comfortable in my financial environment
Great video as usual! The only thing missing, and maybe it would make a very long video so it's understandable, it would be the context on why some periods are better in some regions. In my opinion, the top US stocks are no longer 'US' stocks. The world has changed and most top US companies get around 30-50% of their revenue from overseas. Some of these companies have, at present, competitive advantages due to large investments made in the past so it's hard to see how the next Microsoft will come from Europe or Asia in the near term. This could change in the long term but I think it's safe to say that American enterprises will still dominate in the medium-short term. If an investor, follows the current trends and stays informed, shouldn'tt need to have a portfolio for 'every scenario'. Again this is just my opinion.
Not sure what you mean by funds but do you not consider change in fund management is important? As technologies improve maybe tech funds are gaining an advantage over a smallcap as a long term trend. Having said that I am a believer in , no it's not different this time.
Hi Ramen say once you retire then you sell you sell your stocks and shares ISA.. Put that money in your building society or bank savings account is that money still considered as tax tree?? Or is it only tax free when it sits in a S&S ISA
If you hold investments outside of a tax wrapper like ISA/pension then any returns are taxable subject to annual tax free allowances and your personal tax situation.
I just switched up my Roth IRA to 50% SCHD, 25% SCHX, 25% SCHG, and my Roth 401k is 70% vanguard S&P 500 index, 20% vanguard growth index, and 10% vanguard international index. Seeking best possible ways to grow $350k into $1m+ before retirement in 3 years.
Congratulations on listening to Dave Ramsay although by the looks of your comment you have no technical or instinctive understanding of stock markets. Still good to invest, but it’s clear you do not actually know what you are doing.
I don't quite understand why I should look at a 10 year period? I probably won't hold any ETFs for more than a year or two. Inside an ISA or SIPP I can switch to different ETFs with no tax penalties. So why not just (for instance) have a core portfolio of S&P500 or Nasdaq now, and then if that starts to look more uncertain, switch to a global or quality or value or emerging market core or whatever? For instance, why would anyone well under retirement age be investing in UK or gilts, etc. when USA, Tech, AI, Crypto, Finance has shown such good performance and is likely to continue for at least the next 6 months or more? I can always switch into something else and an ETF with lots of holdings is not going to crash (except in the case of crypto!)? I can understand a more cautious approach if a person is in retirement and drawing on the portfolio, but you can always switch to more stable, lower return funds at any time. e.g. IITU Tech ETF has performed well over last 5 years. Even if IITU crashes 50% after 5 years, I would still be better off than MSCI World SWDA and x4 better off then a UK ETF such as IUKD.
Because you will misjudge the low points, miss the recovery and end up chasing media trends. If an ETF crashes 50%, that just means a 50% price reduction on your next share purchase.
You can argue that companies in S and P are already global companies and they not operate only in USA ..in that terms you can say that S&P is global fund even that is based in USA ??
Sure but there is a risk that rest of the world might not always be happy with US tech companies bleeding their economies China doesn't allow Google Facebook Microsoft etc What if Europe or other blocks did the same
I have vanguard s and p vhyl and veve which overlap quite a bit so I’m heavy on mag 7 as I have Tesla apple and nvidia individually so maybe I should switch to the s and p weighted
I am 50/50 Nasdaq 100 to S&P 500. Doing well, but thinking of going 100 % Nasdaq 100. Most progressive and innovative companies seem to only.want to list on that Index these.days.
@@dan-jh4mz look at CALF. It weeds out the debt riddled companies that don't have good free cash flow. It's US centric so maybe get some non US ETFs and compensate for sector allocation as many EMs are less tech heavy and geared more toward consumer and finance. Also look at beaten up sectors. Miners are hated despite record gold prices. Canada has many on the venture exchange, but only allocate very small amounts as the chance of some of them going zero is probably similar to the chance of some of them 10x'ing over the next decade.
The ten year return from 1969 might not apply going forward because a lot of those countries have aged and don't have the population growth of the past.
I'm in the global MSCI. I'm betting on big successful companies continuing to be successful. That more than half are US is irrelevant to me. If the US slowly loses its dominant position then a few US companies will drop out and be replaced by companies from somewhere else. Self correcting.
Solid analysis as always. The S&P is massively overbrought, and has insane valuations but it'll probably keep pumping longer than expected because of the mechanisms/flows of passive investing. Mike Green has done a great deep dive on this with Blockworks Macro. An era of monetary inflation might change the dynamics that have been in play since 2008 that you talk about.
There is a lot of wild exuberance at the moment especially in crypto but also in tech, in general. It all feeds off each other and tech especially has helped pump up money flows into the whole S&P. Something could easily trigger a pullback to more sane valuations. A crypto crash, for example could cause a contagion problem because of leverage. Insane bets are being made in the belief the US will back the dollar with BTC.
@@nighttrain1236 crypto for the most part doesn't have issues because it's the nearest thing to a free market, and beyond speculation, it's not used for much. The nature/mechanisms of the perpetual futures market means crypto self corrects, albeit violently and without regulation. I'm more worried about government bonds in the west because we have huge debt to GDP ratios and we've designed a financial system where these bonds are the 'risk free' collateral that act as the foundation for transactions further up. Gold will probably have it hey day again (might still be a decade off, but it seems to be on par with S&P performance) because this will be the one thing that has no counterparty risk. There's a reason why Central Banks have shifted this way over holding fiat
@@chris-3 for now. I think we'll notice companies like Apple will lose traction as their total addressable is saturated. The problem with large US stocks is who will provide the exit liquidity when the trend reverses? Central banks will be forced to intervene if not careful
Thanks Ramin, great video as always! How does this non-significant difference between countries stack up with market cap weighted portfolios? Would this not indicate you should have an equal weighted global portfolio divided equally between how many markets you include?
As a US investor I think US outperformance is mostly related to reserve currency status , personally I go total world small cap value ,as that currency premium is likely to wane. Lol , our days are numbered.
@@AlexisMoore-nx6wf I would be careful, lots of non performancing companies in the Russell. You might want to look at subsets of the Russell like the CALF ETF that focus on profitable value small caps.
is it meaningful to analyze funds over many (10) years? different holdings. different fiscal and monetary policies every 4 years. increasing national debt. fund managers retire and are replaced with new managers. its not just the yields that change, but everything about the fund turns over every few years. comparing a fund today with the "same" fund 10 years ago is like comparing apples and oranges. the basic definition of the data has changed. the only thing that doesn't change is the fund's trading symbol.
10 years is nothing in terms of the financial markets. If you only take into account the last 10 years, you would say that stocks are a lot less risky than they actually are. You’d be missing the lost decade of the 00s and US large caps losing to inflation from the mid 60s until the 80s. You’d be missing periods when bonds outperformed stocks or when international markets outperformed the US. The last 10 years have been exceptional and you shouldn’t plan your whole investing life based on one of the best 10 years periods that the market has had in history. For example, the last time the market did so well, there came the Dot Com Crash. I’m not saying this so you don’t invest in the market, but the idea is that you should be truly diversified.
There's a long way to go from the bottom to the top, Vs already being at the top and needing to go further. Indonesia could build a dozen bullet trains but Japan already has bullet trains and equivalent transformation in speed is no longer really possible or at least easy.
I’m just not hearing any positive stock market news from any other part of the world. UK and Europe is practically finished, Asian and pacific markets are struggling so my concern with a worldwide index is all you’ll see is worldwide decline offsetting US gains.
Then your instinct may be picking up that the stock market is entering a long drawn out sluggish period. Markets are highly sensitive to sentiment. There’s simply no way these returns can keep going much longer, if the guy with £100k is getting rich then the guys with $2billion must be floating away into different galaxies. It simply can not keep going.
You are comparing across a number of decades. Why is that relevant to investing now? The world has seriously changed since the 70’s. The S&P 500 only does well because of the Mag 7. Nasdaq 100 will surely outperform anything else?
People in these comments miss the point - You need to get out & start competitive businesses and invest in property building & become doctors and actually do meaningful actionable work and have children. The market is meant to be there for your retirement so get out and make actual difference in the world instead of worrying & procrastinating about which 0.14 fee etf to invest in.
I think you miss the point. This video isn't about entrepreneurship. Nor is it about real estate investing. You're going out of the way to exhort people to share your view point.
You can not just invest and expect it to grow. We are entering the world of a.i. and many job losses. If people want a good lifestyle they have to create it even more so today than 20 years ago.
Saying there isn't much difference between the funds so we should be indifferent isn't right. The difference over a lifetime of even a 1% annual difference is enormous.
Business in 2025 and beyond is not the same as business in 1969, large cap US companies include some big GLOBAL players who are able to distribute products in a short space of time to the entire world, you could not do that in 1969 without the internet and logistics that we have today.
That's very interesting and useful. Your videos have been important for my understanding. The statistics that you use assume independence but are likely to be related - in periods when one is up others are likely to be up to. So, your graphs will underestimate the likelihood of differences in performance.
To avoid buying funds with companies in that supply arms to Israel to commit war crimes I would suggest buying an ESG version of your chosen fund or alternately UK Bonds, Gold and Bitcoin
The time you’ll wait for that crash to come you will miss out on returns. It’s never a good idea to try to time the market. Time in the market is key. I can see why you think like this. I did too when I first started out late 2020. What I ended up realising after a few years is, markets are generally speaking, always at, or near all time highs. DCA or drop the lump sum in one go, either is always better than just waiting on the outside, procrastinating about whether and when to pull the trigger.
Can’t remember which investment bank it was who said it, but they said that their most successful investors were the ones who had died and the bank wasn’t informed. The dead investors stayed invested and didn’t tinker around with their investments.
I’m not sure how analysis of countries the way you suggested helps going forward. For eg VHVG has 6.4% Japan, France 2.6%, Switzerland 2.4% Germany 2.2%… so if any of these countries outperforms the SP500, this isn’t going to be reflected in the fund performance over 10 years, given the small percentages allocated to other countries.
I suppose all this is interesting but I don’t expect to be alive in 30 years so it’s rather academic, what happens over the next 10/20 years is more interesting. Extrapolation from a long time ago forms a fun graph but is really time wasted, I think.
I'm new to stock and crypto. I feel like I’ve missed out on good buying opportunities by investing at the wrong times. With a $450K yearly income, I'm considering putting my savings into the market. Do you think I should learn to invest myself or rely on a financial advisor? I'm getting frustrated trying to find the right coins on my own.
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Interesting, thank you Ramin.
Such a good video, love a bit of technical analysis from Ramin
One thing that also attracts people (specially in EU/UK) to SNP500 funds is relatively lower fees compared to e.g. diversified "World" and especially "All World" indices. Did your analysis include total returns (minus the fees)?
Good point.
I've had a well diversified portfolio for decades. I live in the US and I admit it's focused heavily on US stocks. But I've got a fair chunk spread across several international funds as well. They've all done well for me. Though I admit the S&P has been on a tear these last few years. I didn't start out with an oversized investment in it, but I ended up with one. Though as part of rebalancing now that I'm retired I've pulled some of that money out of equities across the board and into good old boring bonds. I'd have rebalanced and taken some of that money out of the S&P in any case though. These days the S&P 500 is really the S&P 7 and while the returns have been great it's also volatile as you point out.
im middle aged with a modest amount to invest in the s&p but it looks over bought ,waiting for a dip
looking forward to the sp500 Xmas rally. FTSE, not so much.
As an investment enthusiast, I often wonder how top-level investors are able to become millionaires through investing. I have a significant amount of capital to start with, but I'm unsure about the strategies and direction I should take to help me generate substantial profits like some people are this season.
I’m not in a position to offer financial advice, but given the significant amount of capital you're working with, it would be wise to consult a financial advisor who can guide you in developing a strategy tailored to your goals and risk tolerance.
Past performance is not a guarantee for future returns!
Completely different times and companies in the 70s, 80s, 90s and so on...
It's hard not to continue with the S&P 500, when the largest companies in the world are contained within it.
A world index contains about 60% S&P500 companies
@kaya051285 all the upside from the all world fund is basically from the US anyway. So if that market goes down, so does the world fund.
Reflected in the buy price though.
@@kaya051285yep exactly that 👍🏼
Have you considered the whole US market, like the US Equity Index Fund? How would that compare?
10:32 the 10 year return distribution would be very useful if it included reinvesting dividends. Could this be updated, please so it accurately compares the UK market?
Another great episode with unmatched uniqueness
Would be quite helpful if the worst/best case 10yr scenario was extended to also show for 20yr, 30yr which is likely more common timeframe for many of us, especially considering in many countries you pay less capital gains tax after longer periods (and would likely aim to hold for that long)
11:16 I totally agree that a global index is better, but you do have to be careful as most ‘global’ indices are 60~70% weighted in the US market. So you you’re only actually diversifying a third into ex-US.
Good analysis. Well presented. Food for thought.
6:21 doesn't the thing you just said before about being accurate on the date ranges you're comparing apply here too?
if you're comparing a sliding 10 year window but snapping each of them to the start of the year aren't you over biasing towards those dates?
That's a lot of green in this video for some reason...I was just in Westminster Abbey and their seasonal altar hanging - or whatever it is - color is also green for the moment... Hmmm
This was the investment video I didn't know that I needed.
Thank you, Ramin.
Quick question… where specifically can we find the tool where for fund comparisons. Great video as always! Thanks for the advice
I've gone with VNRG which is basically S&P500 + Canada.
Another brilliant, insightful video. Thank you 🙏
What a great video. I sometimes worry that, if there was a big crash in the S&P 500 (above 20%), would the other stock markets worldwide follow suit? It will also be interesting to see what happens with UK stock markets, given the proposed pension fund changes. We live in interesting times.
Most likely yes - in 2007 crash for example American took the world's equities down with it. Same in the 2000 crash. But this makes total sense because US equities are like 70% of global equities. So when they get hit every global fund takes a sh*t as well.
They all tend to follow.
“When America sneezes the world catches a cold.”
The UK stock market is a wheezing, dying elephant, much like the UK itself
Excellent analysis!!
Thank you @panagiotisanastasopoulos107
This is so interesting and helpful. I’ve been wondering why your main portfolio is a total stock market fund and I guess this is why. Your research determined that even with your investing background you decided you couldn’t outperform the market by picking stocks!
@Pensioncraft I've been trying to do this for a long time but struggling to find historic performance (greater than the last 10 years) as a UK based investor where have you found is a useful source of historic annual performance data?
Hello sir, i have so many of my company stocks from options, espp offers. Do you have a video or strategy on how to get out of single stock concentration situation? Thank you for your videos.
+1. Pretty please!
16:07 what is this portfolio exactly? i didnt understand
@ramin, transparent exposition of useful contents, as always. Sincere congratulations!
The S&P 500 should be in ‘buy-the-dip’ territory, as leading indicators for profits continue to improve. I believe the S&P500 will go over 6000 eventually. Making Investors like me believe that “Santa has come early” to markets to find out the best additions to a $500K portfolio to boost performance.
I think you're just better off with majority investment in S&P500 and uprising equities cos they always outperform. Alternatively speaking to a certified market strategist can help with pointers on which to acquire
Curious what makes you think profits will continue to improve?
Great insight. When S&P 500 is running so hot, it's always a good time to think about de-risking. I'll till more towards equal weight S&P 500 index (RSP), small cap value (AVUV), developed world ex-US (VEA) and 10-year treasury is about 4.5% and it's getting interesting to add some (TLT).
I looked up for an ex-USA ETF / developed market ETF like ACWX and VEA, the yearly return of the past 10 years 3.70% and 5.46%, these barely beat even the inflation rate in the past 10 years....
if US market is gonna to crash soon and underperform for the next, like 10 years, the whole world is gonna to suffer, possibly and particularly its allies. The question is, should I instead by a particular country / region index ETF instead of buying these ex-US ETF / developed market ETF that buying every stock in the world?
Past performance is no guarantee of future returns. US small cap had its glorious days in the past century but have been loosing a lot in the past 20 years.
Note that in the 1970s and '80s many people had defined benefit pension, and the flow of cash going into the stock market was much less. Now the situation is very different - billions are pumping into the US stock market every day from private pension funds.
And simultaneously being withdrawn from those funds from retirees. Eventually the withdrawals will outpace the deposits driving the return down.
@@muffemod Any evidence of this? Withdrawals are gradual - retirees typically don't withdraw hundreds of thousands at once! And the US stock market is invested in by people worldwide, not just the US.
Indeed DB was prevalent, but the trustees of those schemes had to invest in equities too…
@@muffemod It's always been that way. There were only 4 investments the pension plans invested in, Equities, Bonds, Real Estate (whether direct, REIT's, or mortgages), and Treasuries.
The pensions were never just "free money". They were generally separately managed liabilities handled by different companies, whether it was outsourced or in house.
So nothing really changed anyways. The only difference is that instead of the money being put into pensions, which would then be invested into the market and other investments, they are now being put into 401K's and then being put into managed funds by the big 3 (vanguard, fidelity, schwab).
So essentially there is no difference, except that companies now pay less for retiree benefits.
@@tancreddehauteville764 Yes there is. It's been documented.
For me its Do I have a cash fund to tide me over on the drops? Are the drops buying opportinities? and it will always come back so dont panic . So its a hard sell to promote other funds . for my money
Your cash fund that tides you over on the drops may have to last quite a few years. See minute 2:20 (6 year drop) or the drop between the early 70's and 1988. Would your cash fund last 15 years? I suspect most people's cash fund would last 1-4 years max.
@@grantedwards7357 i think 3 years is enough to outlast all but the worst of the worst if the fund is big enough in retirment i wouldnt crystallise everything just what i need after 3 years to get by for a year or so rinse/ repeat wait for the sun it will come back
What I think your analysis doesn't address is the situation, which is the most common, of DCA during medium to long period of time. If that is done, the "unlucky" situation which I believe comes from investing that bulk of money at uncommonly overvalued point in time, say you invest everything you have just before doc com bubble burst, will be completely mitigated. Meaning, DCA into S&P will still prove to be the best strategy over all, "by far". :) Best!
I don’t invest my money in the S&P500 because of past performance.
I invest in the S&P500 because 1)it’s better than leaving it to erode due to inflation.
2) leaving it in my bank account where I’ll be tempted to spend it.
3) All the top companies are listed on the US
yeah... because the S&P is the only fund you can invest in 🤣🤣
@@Hardspace1979 personally it’s the only fund that makes sense to me. I sure as hell won’t invest in the FTSE, that’s equivalent of me lighting my money on fire.
And I find that America love their stock market
I looked into ex-US etf, like VXUS, 5-yr return is 5.78%, 10-yr return is 4.99%
And then I compare to the US inflation rate, long-term average (1990-2023) at around 2.5%, it barely beat inflation and surely underperform to many markets including US stock market.
can you suggest a Russell 2000 ETF. I think smaller companies are best for 2025
I do have some questions in my head now, what if the US market is crashing on 2025, economy of the US is bad and the US stock market will underperform for the next 10 years, just like you said it did happened before in 1969-88 & 2000-10, buying the small cap ETF/ equal weight S&P ETF still would not work since the whole US market would be bad, it might just be slightly better than VOO/SPY at first when it comes to an economical crisis, am I correct or did I misunderstood sth?
For a small cap ETF, in my opinion, it might hit harder during economic recessions due to their higher sensitivity to economic cycles, less access to capital, and potentially weaker balance sheets. If the U.S. economy is in a prolonged slump, small-cap ETFs might not only fail to outperform but could actually underperform larger, more stable companies.
When the US stops out performing I'll shift my US investments. Until then I'm sticking with it. A lot of global funds have 60% or 70% US so it's difficult to get away from.
Workplace pensions often have limited options. Best I could find with a low ish fee is a World Ex UK one but that’s 70% US and a large and mega cap one. There’s a small cap option which isn’t as cheap I could go into for a bit at some point.
Me too, the best historical performer with my provider is the Shariah Compliant Dow Jones Titans 100, it’s quite concentrated and not the cheapest but it’s the only one I can find that invests entirely in quality US stocks with excellent past performance.
Me too with L&G I had to choose the world ex-uk fund, buy some of the UK fund to make it properly global, then added some global small cap too
My target retirement fund in my 401(k) had poor returns compared to the S&P 500. I switched everything to the S&P 500, but I regret not doing it earlier. What are the best options for investing $200k for reliable cash flow?
you need a certified financial expert straight up! personally, I invest in ETF's and also love investing in individual stocks. yes it’s riskier but am comfortable in my financial environment
Great video as usual!
The only thing missing, and maybe it would make a very long video so it's understandable, it would be the context on why some periods are better in some regions. In my opinion, the top US stocks are no longer 'US' stocks. The world has changed and most top US companies get around 30-50% of their revenue from overseas. Some of these companies have, at present, competitive advantages due to large investments made in the past so it's hard to see how the next Microsoft will come from Europe or Asia in the near term. This could change in the long term but I think it's safe to say that American enterprises will still dominate in the medium-short term.
If an investor, follows the current trends and stays informed, shouldn'tt need to have a portfolio for 'every scenario'. Again this is just my opinion.
Great video! Very knowledgeable.
Glad it was helpful! @PhelipCaouette
Not sure what you mean by funds but do you not consider change in fund management is important?
As technologies improve maybe tech funds are gaining an advantage over a smallcap as a long term trend. Having said that I am a believer in , no it's not different this time.
Hi Ramen say once you retire then you sell you sell your stocks and shares ISA.. Put that money in your building society or bank savings account is that money still considered as tax tree?? Or is it only tax free when it sits in a S&S ISA
If you hold investments outside of a tax wrapper like ISA/pension then any returns are taxable subject to annual tax free allowances and your personal tax situation.
I just switched up my Roth IRA to 50% SCHD, 25% SCHX, 25% SCHG, and my Roth 401k is 70% vanguard S&P 500 index, 20% vanguard growth index, and 10% vanguard international index. Seeking best possible ways to grow $350k into $1m+ before retirement in 3 years.
Congratulations on listening to Dave Ramsay although by the looks of your comment you have no technical or instinctive understanding of stock markets.
Still good to invest, but it’s clear you do not actually know what you are doing.
I don't quite understand why I should look at a 10 year period? I probably won't hold any ETFs for more than a year or two. Inside an ISA or SIPP I can switch to different ETFs with no tax penalties. So why not just (for instance) have a core portfolio of S&P500 or Nasdaq now, and then if that starts to look more uncertain, switch to a global or quality or value or emerging market core or whatever? For instance, why would anyone well under retirement age be investing in UK or gilts, etc. when USA, Tech, AI, Crypto, Finance has shown such good performance and is likely to continue for at least the next 6 months or more? I can always switch into something else and an ETF with lots of holdings is not going to crash (except in the case of crypto!)? I can understand a more cautious approach if a person is in retirement and drawing on the portfolio, but you can always switch to more stable, lower return funds at any time. e.g. IITU Tech ETF has performed well over last 5 years. Even if IITU crashes 50% after 5 years, I would still be better off than MSCI World SWDA and x4 better off then a UK ETF such as IUKD.
Hindsight investment is really easy
I hope your crystal ball works well so that you know when to sell one fund and buy another. Chances are you will end up buying high and selling low
@@rezwhapNote the word core in my comment
Because you will misjudge the low points, miss the recovery and end up chasing media trends. If an ETF crashes 50%, that just means a 50% price reduction on your next share purchase.
How do you know what's "likely" going to happen in the next six months are you psychic?
You can argue that companies in S and P are already global companies and they not operate only in USA ..in that terms you can say that S&P is global fund even that is based in USA ??
Sure but there is a risk that rest of the world might not always be happy with US tech companies bleeding their economies
China doesn't allow Google Facebook Microsoft etc
What if Europe or other blocks did the same
Yep
It’s true, but the same applies to large companies outside the US so that particular argument doesn’t favour the S&P.
I have vanguard s and p vhyl and veve which overlap quite a bit so I’m heavy on mag 7 as I have Tesla apple and nvidia individually so maybe I should switch to the s and p weighted
hi, what is the market code for your type of S&P500?
The problem with sp500 since 2008 is that it's been fueled by increasingly larger debts.
I am 50/50 Nasdaq 100 to S&P 500. Doing well, but thinking of going 100 % Nasdaq 100. Most progressive and innovative companies seem to only.want to list on that Index these.days.
a great video would be on how snp500 is only ever gonna breakeven since the rate of currency debassment is at 11-15% 😮
What I don’t understand is that during doth these bad times it still averaged 7/10 %. So to me it doesn’t matter
This is a great approach. I wish there was an app for this? I would like to do this with individual ETFs. It will take me forever to do in Excel.
This is a great video
Thanks so much @VitalyYuriyevou
Another great video. Thanks
Glad you enjoyed it
Great video!
What are some small cap value etfs? I take it the Vanguard all world small cap fund is not small cap value?
@@dan-jh4mz look at CALF. It weeds out the debt riddled companies that don't have good free cash flow. It's US centric so maybe get some non US ETFs and compensate for sector allocation as many EMs are less tech heavy and geared more toward consumer and finance. Also look at beaten up sectors. Miners are hated despite record gold prices. Canada has many on the venture exchange, but only allocate very small amounts as the chance of some of them going zero is probably similar to the chance of some of them 10x'ing over the next decade.
AVUV is a popular and well regarded small cap value fund.
The ten year return from 1969 might not apply going forward because a lot of those countries have aged and don't have the population growth of the past.
Be interesting when Microstrategy are inc in the S&P500.
Time in the market >> timing the market
The future is artificial intelligence and robotics.. Huge growth potential.. SP for me and Japan
I'm in the global MSCI. I'm betting on big successful companies continuing to be successful. That more than half are US is irrelevant to me. If the US slowly loses its dominant position then a few US companies will drop out and be replaced by companies from somewhere else. Self correcting.
Then 4% of your investment is in the UK, which is a busted flush.
Great video as always. many thanks !! 😀🙂
Great analysis.
That's nice
Alright thank you
The Ben Graham/Warren Buffet value investing strategy seems to be the best. I try to buy stock when they're cheap and pay a good dividend.
Solid analysis as always. The S&P is massively overbrought, and has insane valuations but it'll probably keep pumping longer than expected because of the mechanisms/flows of passive investing. Mike Green has done a great deep dive on this with Blockworks Macro. An era of monetary inflation might change the dynamics that have been in play since 2008 that you talk about.
There is a lot of wild exuberance at the moment especially in crypto but also in tech, in general. It all feeds off each other and tech especially has helped pump up money flows into the whole S&P. Something could easily trigger a pullback to more sane valuations. A crypto crash, for example could cause a contagion problem because of leverage. Insane bets are being made in the belief the US will back the dollar with BTC.
Yes, but the US companies keep increasing their revenues and profits. So the valuations seem to be justified, at least for now.
@@nighttrain1236 crypto for the most part doesn't have issues because it's the nearest thing to a free market, and beyond speculation, it's not used for much. The nature/mechanisms of the perpetual futures market means crypto self corrects, albeit violently and without regulation. I'm more worried about government bonds in the west because we have huge debt to GDP ratios and we've designed a financial system where these bonds are the 'risk free' collateral that act as the foundation for transactions further up. Gold will probably have it hey day again (might still be a decade off, but it seems to be on par with S&P performance) because this will be the one thing that has no counterparty risk. There's a reason why Central Banks have shifted this way over holding fiat
@@chris-3 for now. I think we'll notice companies like Apple will lose traction as their total addressable is saturated. The problem with large US stocks is who will provide the exit liquidity when the trend reverses? Central banks will be forced to intervene if not careful
Even in a well diversified global fund, over three quarters are dominated by the USA?!?
Thanks Ramin, great video as always!
How does this non-significant difference between countries stack up with market cap weighted portfolios? Would this not indicate you should have an equal weighted global portfolio divided equally between how many markets you include?
So basically buy a cheap global index fund, and pepper on top a bit of US small cap value.
As a US investor I think US outperformance is mostly related to reserve currency status , personally I go total world small cap value ,as that currency premium is likely to wane. Lol , our days are numbered.
@faustzxc I've been wondering about that too. Any recommendation for total world SCV etf?
@@fbizri100 I'm limited to my 401k , invesco Small cap value , VSMIX .
If you have access to Avantis funds I'd split US. and international.
Another absolute Zinger! Thanks Ramin!
My pleasure!
Got it. All in on US small caps.
@@AlexisMoore-nx6wf I would be careful, lots of non performancing companies in the Russell. You might want to look at subsets of the Russell like the CALF ETF that focus on profitable value small caps.
is it meaningful to analyze funds over many (10) years? different holdings. different fiscal and monetary policies every 4 years. increasing national debt. fund managers retire and are replaced with new managers. its not just the yields that change, but everything about the fund turns over every few years. comparing a fund today with the "same" fund 10 years ago is like comparing apples and oranges. the basic definition of the data has changed. the only thing that doesn't change is the fund's trading symbol.
10 years is nothing in terms of the financial markets. If you only take into account the last 10 years, you would say that stocks are a lot less risky than they actually are. You’d be missing the lost decade of the 00s and US large caps losing to inflation from the mid 60s until the 80s. You’d be missing periods when bonds outperformed stocks or when international markets outperformed the US. The last 10 years have been exceptional and you shouldn’t plan your whole investing life based on one of the best 10 years periods that the market has had in history. For example, the last time the market did so well, there came the Dot Com Crash. I’m not saying this so you don’t invest in the market, but the idea is that you should be truly diversified.
That's a very interesting metric upon which to review performance.
Surprised with how well emerging markets have performed in comparsion over the long term
There's a long way to go from the bottom to the top, Vs already being at the top and needing to go further. Indonesia could build a dozen bullet trains but Japan already has bullet trains and equivalent transformation in speed is no longer really possible or at least easy.
Just not double down during the drop period
The us is capital friendly at least for now that i think explain the returns
It's a bit misleading using only 1970 onwards, why not use from 1950 onwards?
I’m just not hearing any positive stock market news from any other part of the world. UK and Europe is practically finished, Asian and pacific markets are struggling so my concern with a worldwide index is all you’ll see is worldwide decline offsetting US gains.
Then your instinct may be picking up that the stock market is entering a long drawn out sluggish period.
Markets are highly sensitive to sentiment. There’s simply no way these returns can keep going much longer, if the guy with £100k is getting rich then the guys with $2billion must be floating away into different galaxies.
It simply can not keep going.
You are comparing across a number of decades. Why is that relevant to investing now? The world has seriously changed since the 70’s. The S&P 500 only does well because of the Mag 7. Nasdaq 100 will surely outperform anything else?
How the weird portfolio is made?
So VHVG then...
Should listen to MHR this week.
I like the Vanguard US Equity Index Fund, it's diverse enough for me.
Keep Buying
no
People in these comments miss the point - You need to get out & start competitive businesses and invest in property building & become doctors and actually do meaningful actionable work and have children.
The market is meant to be there for your retirement so get out and make actual difference in the world instead of worrying & procrastinating about which 0.14 fee etf to invest in.
I think you miss the point. This video isn't about entrepreneurship. Nor is it about real estate investing. You're going out of the way to exhort people to share your view point.
Bizzare statement, you have no idea what "people in these comments" are doing with their lives.
You can not just invest and expect it to grow. We are entering the world of a.i. and many job losses. If people want a good lifestyle they have to create it even more so today than 20 years ago.
This kind of diversification won’t protect you from a crash when all the correlations tend to 1.
Saying there isn't much difference between the funds so we should be indifferent isn't right. The difference over a lifetime of even a 1% annual difference is enormous.
Not quite what was said….
@TM-yr3pc That's literally a direct quote..
Business in 2025 and beyond is not the same as business in 1969, large cap US companies include some big GLOBAL players who are able to distribute products in a short space of time to the entire world, you could not do that in 1969 without the internet and logistics that we have today.
Exactly. I wish people would stop these ridiculous comparisons to yesteryear.
That's a very interesting point, so what's your conclusion, is s&p undervalued, are we on the cusp of a big surge instead
Nasdaq 100 is actually more global than the S&P 500 in terms of revenues
You should invest in better audio, content is too good to have a poor audio
That's very interesting and useful. Your videos have been important for my understanding. The statistics that you use assume independence but are likely to be related - in periods when one is up others are likely to be up to. So, your graphs will underestimate the likelihood of differences in performance.
To avoid buying funds with companies in that supply arms to Israel to commit war crimes I would suggest buying an ESG version of your chosen fund or alternately UK Bonds, Gold and Bitcoin
“Dry powder” on standby - I want a market crash and 6% interest rates. I like markets ticking up but it’s getting silly now.
The time you’ll wait for that crash to come you will miss out on returns.
It’s never a good idea to try to time the market. Time in the market is key.
I can see why you think like this. I did too when I first started out late 2020. What I ended up realising after a few years is, markets are generally speaking, always at, or near all time highs.
DCA or drop the lump sum in one go, either is always better than just waiting on the outside, procrastinating about whether and when to pull the trigger.
Can’t remember which investment bank it was who said it, but they said that their most successful investors were the ones who had died and the bank wasn’t informed. The dead investors stayed invested and didn’t tinker around with their investments.
You are living in a dream world. If you missed the 2020 crash you’ve missed the next 20 years of returns.
I’m not sure how analysis of countries the way you suggested helps going forward. For eg VHVG has 6.4% Japan, France 2.6%, Switzerland 2.4% Germany 2.2%… so if any of these countries outperforms the SP500, this isn’t going to be reflected in the fund performance over 10 years, given the small percentages allocated to other countries.
3x S&P 500 Fund. SPXL 👍
Terrible idea - the House always wins with leveraged funds because the drawdowns are mathematically going to wipe you out.
All life is a game of luck!
I suppose all this is interesting but I don’t expect to be alive in 30 years so it’s rather academic, what happens over the next 10/20 years is more interesting. Extrapolation from a long time ago forms a fun graph but is really time wasted, I think.
tom lee projects 15000$ by 2030
what will be $15000?
@nev-dd9jq snp projected price by 2030 it's set to increase
@@simple_futures the scottish national party ???
A great video. My charts currently indicate that the S&P500 is due for a correction >20%.
😂
I'm new to stock and crypto. I feel like I’ve missed out on good buying opportunities by investing at the wrong times. With a $450K yearly income, I'm considering putting my savings into the market. Do you think I should learn to invest myself or rely on a financial advisor? I'm getting frustrated trying to find the right coins on my own.