“Why does everyone recommend VTSAX index funds?” Jonathan and Brad shed some light on why VTSAX is so popular, and also some other options if you have a brokerage account other than Vanguard.
This is an excerpt from episode 165R of the ChooseFI Podcast you can listen to the full episode here
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Buy SPY. Sell covered calls at the 20 delta. Easily add 4% annually to your returns.
Here in uk vanguard :), does not cost $3000. additionally, for UK resident, Schwab is way too expensive. they ask $25.000 minimum to invest. on the other hand, vanguard asks £500 minium or direct debit of £100 a month.
I do like vanguard because of their founder. Jack bogle who chose to put first the investor’s interest.
I sub! Such a good channel!
This is the EXACT content I've been looking for, for the past 2 days.
Yeah why would you pay the fee to fidelity? They just want you with their funds. With that said Vanguard is superior because their ownership structure.
Good video to help clear up the confusion some people have when they first start on the FIRE Journey. It took me so long to understand what a basis point was hahaha
No. If you overlay the s&P 500 and VTSAX, they are almost exactly the same. No meaningful difference. Especially over a long time period.
$75!!!!! Where
my cousins started with ITOT (fidelity) for a cheaper entry level.
Fidelity has zero trade fees but don’t they charged 3% commissions when you sell? I hope I’m wrong.
"I think the broader the better"… /Invests in one country
How do make money by not charging any basis points
I'm with Charles Schwab for most of my investing, and a little in Fidelity (Fractional shares of big growth companies). I personally use SWPPX Index mutual fund for majority of my IRA. I use ETF "SCHB" for my taxable account.
SWTSX and the SCHB are just as good as VTSAX or VTI. The only minor differences would be dividends; which Vanguard provides a higher percentage.
Great podcast
I think Vanguard has become en vogue mostly because Vanguard has always been the standard when it came to low cost index funds and that caught on with the Youtube community. However there are, as you mentioned, many other brokerage firms that have had competing funds that have been in existence for a long time as well. The Fidelity fund FSKAX has been around since 1997 and FXAIX since 1988 so both funds have been vetted through the test of time and if you compare it their Vanguard counterparts the performance is practically the same. The Fidelity ZERO funds came out in 2018 so they're still very new.
I'm a Fidelity customer for a few reasons. 1) It's who my employer goes through and I get an company match 2) Their funds are very low cost. I have a mix of their Zero funds along with other low cost index funds across a 401k, Roth IRA, and HSA 3) Their online and phone app interface is easy to use 4) Their customer service is FANTASTIC. Every time I have called them they have been supportive and answered all my questions. They also have physical branch locations. I'd say their accessibility is second to none. I think that's very important when you're dealing with 6+ figure accounts.
Vanguard is great but competition breeds excellent and you can see that with all the brokerages trying to leap frog each other. When you break it down and compare similar funds across the brokerages the difference is often negligible. Now that I've been a Fidelity customer for 5+ years I can say I'm completely satisfied with them and honestly even if my employer didn't go through Fidelity and I was picking my own I would probably pick Fidelity over Vanguard for various reasons mentioned above other than the funds themselves.
FZROX was saying it was closed to new investors when I tried to get in last week
Vti expense ratio 0.03% vtsax expense 0.04%.
VTSAX is a great fund, I own it as well however I think it's a misunderstood fund. VTSAX is a large blend fund which correlates extremely closely with the S&P 500 itself. For all practical purposes it is the S&P 500. This is fine however there is virtually no diversification benefit to holding everything in VTSAX although most people think they are getting a variety of exposure – Mid Cap, Small Cap etc. you're not in any meaningful way because the weighting of Mid and Small caps are so fractionally small it makes no difference.
One still needs a separate Mid and Small Cap fund to get meaningful asset class diversification in their portfolio. The problem is that people chant VTSAX, even experienced investors, and refuse to accept an explanation that it isn't diversified. This in my opinion is just ignorant.
If one does not want to diversify then that is fine but don't own VTSAX and think you're diversified because you're not. I hold VTMSX as my Small Cap fund (tracks the S&P 600) and it isn't correlated with the S&P 500 at all, in fact it has performed very differently in different parts of the business cycle which is what you want when you diversify.
VTSAX is really part of the FIRE starter kit. People feel more in line with their goals when they get Vanguard funds because they feel its a requirement for FIRE, while overlooking bp.
You can also buy the very same fund, but different shareclass, as VTSAX on Fidelity or any other brokerage in the form of an ETF with the ticket if VTI. On both Fidelity as well as Schwab, you can even buy the ETF version commission free and using fractional shares.
Fidelity Zero Funds have changed the everything. Fidelity is now beating Vanguard at their own game..
Vanguard was first. Thus, all the extra (long-standing) attention.
any total stock market index fund option for NRA (non resident alien)?
Vanguard is the reason why cost have come down, they are the reason why fidelity has it zero based funds. By supporting vangaurd you are in a way gaurantee low fee, not only for yourself buy everyone as well. That said, I am a fidelity customer and prefer the simplicity of having everything at one place. If Vanguard had a cash managment account and an HSA option, I would probably leave fidelity for vanguard
I think for many, like myself, have read the book The Simple Path to Wealth by JL Collins and it was a good place to start and he is a huge fan of VTSAX
Enjoyed the video. I invest in stock market ETF’s here in the U.K. I wouldn’t trust myself to pick individual stocks.
2:37 – that’s the key. Broad based, low cost index funds!