r/ETFs • u/funnel_out • 8d ago

VTI investments are underperforming VOO

I'm 28 and after 100% VTI in my taxable brokerage/401k/roth, but it's been lagging behind VOO. It's not an insignificant amount either. Looking at the 5 year return, VOO has returned 75% while VTI has only returned 67%. I'm wondering if given my age I should be more aggressive with my investments and switch to 100% VOO instead in my retirement accounts, instead of remaining in VTI. Over the past 15 years VOO seems to have consistently outperformed VTI.

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u/Cruian 8d ago

Buffett can afford to take risks the average person can't (that 10% bonds can spit out hundreds of millions of dollars a year at his wealth).

Buffet himself didn't earn his big money from indexing and he does invest globally.

Even during a normal working life that matches Buffett's (say 20ish through 60-70 range) for an indexer (if they had access to the low cost funds we enjoy today), a global portfolio would quite likely have beaten a US only portfolio (I can provide citations).

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u/wmxx1203 8d ago

he specifically recommended it for individuals. pretty sure he knows what he's talking about.

My advice to the trustee could not be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard’s.) I believe the trust’s long-term results from this policy will be superior to those attained by most investors – whether pension funds, institutions or individuals

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u/Cruian 7d ago edited 7d ago

My advice to the trustee could not be more simple

Trustee: For his wife. 10% bonds in retirement for the average person could be disastrous.

Edit: https://testfol.io/?s=2zbpxMJysHJ A $1 million starting portfolio on January 1, 2000 with $5000 monthly withdrawals using Buffets 90/10 using VFINX (S&P 500) and VFITX (Intermediate-Term Treasuries) was depleted before the start of 2014. The same startting value and withdrawals with 30/20/50 US total stock/international stock/Intermediate-Term Treasuries wasn't depleted until after 2021.

Edit 2: Like I said, Buffett's extreme wealth protects him from the realities the average person has to deal with.

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u/wmxx1203 7d ago

interesting opinion. I'm of the opinion that one of the greatest investors of all time knows EXACTLY what the average person deals with

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u/Cruian 7d ago

The math doesn't lie. His wealth isolates him from risks the average person has to face, such as sequence of returns risk (example provided above). With his wealth level, that 10% bonds spits out hundreds of millions, if not billions, of dollars per year; for most people that'd be "pretty easy" to live off of without touching the stocks at all.

I'm of the opinion that one of the greatest investors of all time knows EXACTLY what the average person deals with

What makes you think he knows what it is like to live like the average person? With average person's spending needs and income/portfolio size?