Is there a better index fund to own?

[jacob]

Well, you can go larger (Russell3000) or smaller (DJIA), but that likely has the same issues. Luckily, for people like you (and my mom), there's Wellington, Windsor, and Wellesley. They're actively managed(*), but cost is low and performance is good. Maybe they'll give you peace of mind (for a small fee).

viewtopic.php?f=3&t=9377

(*) Isn't passive management an oxymoron?

[Tyler9000]

If you're looking for a single fund to set and forget, I'm personally a fan of VWINX. But if you're looking for a simple index fund strategy that you can manage yourself, try browsing these options: https://portfoliocharts.com/portfolios/

Most of them can be built on top of the S&P500 fund you already own while notably mitigating downside risk.

[Stahlmann]

I'll join in with diffrent problem.

The idea that most (or many) fund managers piggy back on SP500 hit me hard or other "stable" funds like mentioned in this topic.

I started to thinking if it's international idea.

I know my country takes 40% capital gains obtained in foreign country, but... Has any smart guys gone around this and offered this to "small guys"? I mean what kind of principle would they use?

I've got access to this:
https://stooq.com/q/?s=etfsp500.pl&c=1y&t=l&a=lg&b=0
but I'm hungry

[IlliniDave]

I'm a fan of total market index funds and over the years have been (trying) to shift towards a combination of total-us and total ex-us to be my core equity stake. Tax-loss harvesting machinations have kept me from completely achieving that. I also have some E/M and small cap in addition to those for fun. Tyler's suggestion of Vanguard Wellesley is reasonable if fear of the stock market is keeping you up at night, or a bond index fund.

FWIW I'm on an informal glide path to less equity overall (but more overseas equity as a fraction of the total), and more bonds. Has nothing to do with indexing per se--if people weren't buying index funds they'd be buying other mutual funds or individual stocks so the upward pressure would still be there--it's a combination of valuations and proximity to retirement driving my switch in strategy.

[The Old Man]

Why not a total world fund?
VTWSX (Vanguard Total World Stock Index)

[liberty]

Why not just go all-in consumer staples and health care? (for a 100% equity buy-and-hold portfolio).

https://www.msci.com/documents/10199/04 ... 5e9fb13538
https://www.msci.com/documents/10199/c4 ... 3d3bb77ae6

Staples and health care have historically been among the best performing sectors, but have also had the lowest drawdowns and volatility. People don't skip the toothpaste because of a financial crisis. Staples went down only 23% while the market went down 41% in 2008.

[NPV]

Well, you can go larger (Russell3000) or smaller (DJIA), but that likely has the same issues. Luckily, for people like you (and my mom), there's Wellington, Windsor, and Wellesley. They're actively managed(*), but cost is low and performance is good. Maybe they'll give you peace of mind (for a small fee).

viewtopic.php?f=3&t=9377

(*) Isn't passive management an oxymoron?

Probably I am missing something, but what's the point of owning them if over the (relatively) long run they seem to dramatically underperform S&P 500?
https://finance.yahoo.com/quote/VWNDX/c ... xsfQ%3D%3D

I do understand that the volatility is a lot lower, however assuming your horizon is 10-20+ years it does not seem to matter much...

[liberty]

After FIRE it matters because you each year take out 3-4% of the initial amount. Before FIRE it doesn't matter except for the pain you feel when the market goes down. Imaging your portfolio goes down 50%. Must be quite painful. Maybe the Return on investment is not that good after all if you get depression and anxiety, and even worse: Sell at the bottom and never go back to the stock market.

On the other hand: No pain, no gain.

[jacob]

@NPV - You're missing three points:

1) The OP asked for something less risky which in this context means less volatile.
2) 10-20 years is only a short time unless you plan to retire at age 70.
3) Returns since inception:

• Windsor (1958): 11.38%
• Wellesley (1970): 9.71%
• Wellington (1929): 8.27%
• S&P500: ~9-10% ?

I could also ask you in reverse: What's the point of owning S&P500 when in the long run it has dramatically underperformed Phillip Morris/Altria? https://www.fool.com/investing/general/ ... essfu.aspx

Answer: Same as above.

[slowtraveler]

@Jacob
Some of those tobacco companies have a scary amount of debt and the financials don't look particularly nice but I still the stigma. Currently, it is about defeating the addictive aspect but that has nothing to do with the social aspect. Moreover, E-cigs and vaporizers seem to be under development by many of them and I can't say tobacco is going away any time soon.

Do you honestly think tobacco returns will be anything like they have been in the past?*

@Augustus
Another vote in for Wellesley. Lower volatility than the S&P with a history of good returns that are likely to continue. It has the sector diversification I feel by far the most comfortable with of any mutual fund I've seen.

The SEC yield is over 3% now.

*I hold you in no way accountable for any of the information you post in response to this. I've been considering the big tobacco (and health and food) companies for a long time so my decisions made on any information are 100% my responsibility.

[jacob]

@st - No idea. My point was more to the effect that it's the [investment]-process (strategy) that matters, not simply on what the past returns were. Of course picking an investment based on recent outperformance is also a process and it falls under momentum-strategies.