@JamesMarsh79 Congats! Now you can sell financial products.
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Rick Ferri, CFA
17.7K posts
Rick Ferri, CFA
@Rick_Ferri
"Bogleheads on Investing” podcast co-host; hourly advice-only adviser; authored six books on index funds, ETFs & asset allocation; retired Marine fighter pilot.
Texas Katılım Nisan 2009
609 Takip Edilen31.2K Takipçiler
@MarkMap4 Thank you. I'm well aware of the available funds having wrote six books on the subject.
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@Rick_Ferri 6/ An investor can own the small and large value stocks through low expense ETFs such as through Vanguard, Avantis, Dimensional, etc. ( with the portfolio being held most optimally in tax advantaged accounts )
Read "Stock Market Investing “Cheat Sheet”" at stockmarketmap .com
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When I write on X a single world equity index fund (VT) or ~65% total US stocks (VTI) and ~35% total international stocks (VXUS) is all the equity most people need to achieve their objectives, the pushback I get isn’t from individuals, it’s from advisers who charge high AUM fees.
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@JonLuskin @jamessweeney50 Oddly, a year later, when a very famous Red Wings hockey player and a client of that same manager asked him about Vanguard index funds, the manager came into my office, closed the door, and asked me to explain a few things to him.
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@preston_mcswain @Dividend__Doc To add context, US stock index funds trading in individual companies accounts for only 5% of all US stock trading daily. That's because most index investors are buy-and-hold.
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Preston McSwain@preston_mcswain
"Despite their significant growth, index domestic equity mutual funds and ETFs remain relatively small investors in the US stock markets, holding only 18 percent of the value of US stocks at year-end 2024. Actively managed domestic equity mutual funds and ETFs held another 12 percent, while other investors—including hedge funds, pension funds, life insurance companies, and individuals—held the majority (70 percent)" - ICI 2025 Fact Book @ICI
QME
Another flawed theory about how index funds will crash the stock market comes from the false assumption that 1) boomers will soon sell stocks to fund retirement, and 2) boomers own most of their stock in index funds. Both of these assumptions are flawed.
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@reddogguy1 I'm all for simplicity with a one-and-done fund in a tax-advantaged account. If I wanted more US, VOO is fine, although VTI is the entire market. Just a small difference.
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@Rick_Ferri What do you think of:
50% AOR
50% VOO
80/20 Portfolio with US lean. That’s my retirement buckets.
PS I’d agree with your post, as always.
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@JonLuskin @jamessweeney50 30 years ago, my office manager at Smith Barney told me if he ever heard me say "Vanguard index fund" I would be fired.
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@jamessweeney50 @Rick_Ferri I was once fired from an AUM shop here in San Diego because I kept talking about index funds.
🤷
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@Rick_Ferri @cfpinatl it too me many years of underperformance to learn this lesson.........
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When an adviser buys a growth stock index fund, a value index fund, the S&P 500, a small-midcap index fund, a developed markets fund, and an emerging markets fund, that's called "slice'n dice". It's done to create complexity for job security, because TWO FUNDS would have sufficed: VTI and VXUS.
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@MainlineCapital @Andrew68508 Then I say charge for what you're doing, not on the value of the investment portfolio.
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@Rick_Ferri @Andrew68508 All of this to say, I charge an AUM fee, and never sell myself as an investment guy. 95% of the time I have the client before investments even come up.
And they don’t mind at all paying the 1% fee. Even when they see 30k a year, I’m their cheapest employee.
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@mcmonaghan I disagree. Investing in my 20/20 Hindsight Hedge Fund with 2% + 20% fees is the way to go.
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@Rick_Ferri Investing in Founder strategies is a superior strategy to the antiquated Nasdaq100
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@Andrew68508 Completely agree. Most financial planners in the US charge AUM fees because they're asset managers, not financial planners. A CFP designation after an adviser's name doesn't tell you what they do for a living; how they charge tells you that. AUM means asset management.
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@Rick_Ferri If all of an advisor's time is spent managing portfolios, he's not an advisor. He's a portfolio manager. If he has other tasks he's doing (such as financial planning, risk management, tax optimization, legacy planning) then why is it bad he gets compensated with AUM?
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@jamessweeney50 😞I was once hired to create model ETF portfolios for an adviser. They held between 4 and 6 ETFs. The adviser came back and asked me to double the number of holdings in each model to make them appear more complicated.
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@Rick_Ferri I had a boss explicitly tell me he couldn’t do that (even though our clients were underperforming the simple portfolio) because some of our clients pay over 30k/yr in fees. I left to start a flat fee firm.
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@RealRonSneller @JMechanikong If you buy the whole stock market using a total market index fund, you won’t have to make these guesses that complicate your portfolio. Just own beta.
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@JMechanikong @Rick_Ferri I think it likely continues over the long term. The Nasdaq beating the S & P 500 isn't a short term trend. I do both, in case I'm wrong. I do own both, in case I'm right.
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@RealRonSneller If you want to own tech stocks, buy a tech index fund.
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@Rick_Ferri How is it even possible you guys are saying this, given the relative outperformance of QQQ vs VOO, VTI, and the like? Is this just a straight troll post?
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@DeathStripMall Predicting when stocks won't win has never been a winning strategy.
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@Rick_Ferri I’m not advocating for or against gold, I’m just pointing out large cap market weight doesn’t always win out even over longer stretches. Some would make the case for small cap value as being the best performer long term.
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@Dividend__Doc There is no evidence of that. If stocks are mispriced, others will come in and arbitrage the price. Only 5% of the individual stock volume is in index funds. The other 95% is price discovery.
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@Rick_Ferri Rick isn't it possible that all the money flowing into these indexes - at least to SOME degree - inflates the prices of many stocks that are "along for the ride". Seems plausible there is at least SOME signal here, even if modest.
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@tracknumber06 @Rick_Ferri confirm? the crystal ball takes are the funniest part. nobody's crystal ball works but everyone trades like theirs does.
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@7saintsAJF Why do you think index funds are the only investors in the market? They are a small minority. There's a bid and ask for every stock. The bid side could be anyone.
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@Rick_Ferri Is money purchasing poorly performing stocks and companies every time a person indexes?
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