If i have VTI should I also get VUG?

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Faisal
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If i have VTI should I also get VUG?

Post by Faisal » Tue Jun 13, 2017 3:51 pm

Hey guys what the title says. I have invested in VTI as well as VXUS and BND. Not my full portfolio. But what I feel is relevant. Would VUG be a redudant overlapping purchase?

livesoft
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Re: If i have VTI should I also get VUG?

Post by livesoft » Tue Jun 13, 2017 3:52 pm

I don't even know what VUG is, so I wouldn't get it. What made this pop into your head and bring it to forefront to make you want to post about it? What are your neurons actually doing?
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Topic Author
Faisal
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Re: If i have VTI should I also get VUG?

Post by Faisal » Tue Jun 13, 2017 4:10 pm

VUG is the vanguard growth ETF. I have been shopping around to see if I should add any growth oriented ETFs for my portfolio. The neuron firing reasoning being that the market is doing well. I am relatively young I can handle the risk financially as well as mentally. So thus looking for a growth orientated ETF.

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packet
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Re: If i have VTI should I also get VUG?

Post by packet » Tue Jun 13, 2017 4:20 pm

Faisal wrote:...Would VUG be a redudant overlapping purchase?
Yes.

(edited to clarify which question I was answering)

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Last edited by packet on Tue Jun 13, 2017 4:28 pm, edited 1 time in total.
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CantPassAgain
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Re: If i have VTI should I also get VUG?

Post by CantPassAgain » Tue Jun 13, 2017 4:21 pm

No. You are already sufficiently diversified and should probably find something else to occupy your time.

:beer

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TheTimeLord
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Re: If i have VTI should I also get VUG?

Post by TheTimeLord » Tue Jun 13, 2017 4:22 pm

Personally, I prefer VGT for my growth tilt, several folks here I believe have VHT and I think a couple may still be clutching onto VDE against all odds. Having said all that you really don't need any of them to supplement VTI, IMO, and the simplicity and efficiency of the 3 fund portfolio is a marvel.
Last edited by TheTimeLord on Tue Jun 13, 2017 4:23 pm, edited 1 time in total.
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livesoft
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Re: If i have VTI should I also get VUG?

Post by livesoft » Tue Jun 13, 2017 4:23 pm

Isn't VTI growth oriented? Just because a fund has "growth" in the name doesn't necessarily mean any thing.

How many funds do you know with the words "No Growth" in their names?

Personally, for diversification, I'd look for something different from US large-caps and that has performed well in the past, but poorly this year. That's not VTI and that's not VUG.
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CantPassAgain
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Re: If i have VTI should I also get VUG?

Post by CantPassAgain » Tue Jun 13, 2017 4:29 pm

I like posting this when people point out such and such is doing well lately and should they invest in it:

https://www.callan.com/wp-content/uploa ... d_2017.pdf

Faisal: I hope you take a look at it, think about the implications, and come back here with your thoughts.

Topic Author
Faisal
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Re: If i have VTI should I also get VUG?

Post by Faisal » Tue Jun 13, 2017 4:35 pm

So basically VTI is good enough. Thanks guys.

CantPassAgain, thanks for the chart. I completely understand that ETFs change depending on political and economic realities. The idea of a Growth orientated ETF is to follow the bogleheads philosophy. Invest and leave alone. I am just more inclined to take a bit more risk.

I am also invested in PAK because of all the Chinese investments and before it got upgraded to Emerging market. It should do well barring, US sanctions, a war with India and a military take over. If there is a smooth transition in 2018 it should do extremely well.

Risk is not an issue right now, nor is this a short term investment. I am looking for a long term investment in an ETF focused on growth.

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Re: If i have VTI should I also get VUG?

Post by triceratop » Tue Jun 13, 2017 4:41 pm

Faisal wrote:So basically VTI is good enough. Thanks guys.

CantPassAgain, thanks for the chart. I completely understand that ETFs change depending on political and economic realities. The idea of a Growth orientated ETF is to follow the bogleheads philosophy. Invest and leave alone. I am just more inclined to take a bit more risk.

I am also invested in PAK because of all the Chinese investments and before it got upgraded to Emerging market. It should do well barring, US sanctions, a war with India and a military take over. If there is a smooth transition in 2018 it should do extremely well.

Risk is not an issue right now, nor is this a short term investment. I am looking for a long term investment in an ETF focused on growth.
The point people are hinting at above is that VTI is the correct instrument for investment growth (and risk!). When an ETF is labeled "Growth", that doesn't mean you are taking on more risk for expected higher growth. It refers to investment style, as a counterpart to "Value". Here is a good page to learn about the differences: Growth vs. value investing. Note that a small value or small growth fund does not imply less risk, nor less expected return, simply by the name. Nor do they mean they are not good investments. Similarly, Large Growth and Large value do not imply the reverse.

For international investing, you are taking on uncompensated geopolitical risk by investing in only one or two countries. The recommended diversified international ETF is "VXUS" because it exposes you to all non-U.S. markets.
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

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packet
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Re: If i have VTI should I also get VUG?

Post by packet » Tue Jun 13, 2017 4:45 pm

If I wanted more risk in my portfolio, I would increase the percentage of equities vs bonds... there are those who do go further, however...

:beerCheers,
packet
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Topic Author
Faisal
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Re: If i have VTI should I also get VUG?

Post by Faisal » Tue Jun 13, 2017 4:47 pm

triceratop wrote:
Faisal wrote:So basically VTI is good enough. Thanks guys.

CantPassAgain, thanks for the chart. I completely understand that ETFs change depending on political and economic realities. The idea of a Growth orientated ETF is to follow the bogleheads philosophy. Invest and leave alone. I am just more inclined to take a bit more risk.

I am also invested in PAK because of all the Chinese investments and before it got upgraded to Emerging market. It should do well barring, US sanctions, a war with India and a military take over. If there is a smooth transition in 2018 it should do extremely well.

Risk is not an issue right now, nor is this a short term investment. I am looking for a long term investment in an ETF focused on growth.
The point people are hinting at above is that VTI is the correct instrument for investment growth (and risk!). When an ETF is labeled "Growth", that doesn't mean you are taking on more risk for expected higher growth. It refers to investment style, as a counterpart to "Value". Here is a good page to learn about the differences: Growth vs. value investing. Note that a small value or small growth fund does not imply less risk, nor less expected return, simply by the name. Nor do they mean they are not good investments. Similarly, Large Growth and Large value do not imply the reverse.

For international investing, you are taking on uncompensated geopolitical risk by investing in only one or two countries. The recommended diversified international ETF is "VXUS" because it exposes you to all non-U.S. markets.
I understand that. That is why my question specifically stated would VUG be a redundant overlapping purchase if I have VTI.

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triceratop
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Re: If i have VTI should I also get VUG?

Post by triceratop » Tue Jun 13, 2017 4:52 pm

Okay, but why do you expect the Growth style to outperform in the future? Relying on the recent past is an investment strategy fraught with difficulties. And, the market can do well with Value outperforming, too. Also, the market can do poorly. It's best to set up an asset allocation which one will hold long-term through all market conditions.
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

Christian NY
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Re: If i have VTI should I also get VUG?

Post by Christian NY » Tue Jun 13, 2017 5:05 pm

Now I am confused... doesn't VALUE actually outperform in the long-run? Otherwise why do we often see suggestions to buy VOO and VBR rather than VO and VB?

livesoft
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Re: If i have VTI should I also get VUG?

Post by livesoft » Tue Jun 13, 2017 5:12 pm

Christian NY wrote:Now I am confused... doesn't VALUE actually outperform in the long-run? Otherwise why do we often see suggestions to buy VOO and VBR rather than VO and VB?
No, VALUE sometimes outperforms in the long run. :)

I'd rather own what outperforms in the next 6 months or year or whatever and switch to the next thing that will outperform. My problem is that I cannot figure out a guaranteed way of doing that, so I work on probabilities and expectations.
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dbr
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Re: If i have VTI should I also get VUG?

Post by dbr » Tue Jun 13, 2017 5:30 pm

In any case buying funds because some common attribute that we "should" want is in the name is not how to invest. My gosh, between "value" and "growth" how can we decide?

Christian NY
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Re: If i have VTI should I also get VUG?

Post by Christian NY » Tue Jun 13, 2017 5:33 pm

livesoft wrote:
Christian NY wrote:Now I am confused... doesn't VALUE actually outperform in the long-run? Otherwise why do we often see suggestions to buy VOO and VBR rather than VO and VB?
No, VALUE sometimes outperforms in the long run. :)

I'd rather own what outperforms in the next 6 months or year or whatever and switch to the next thing that will outperform. My problem is that I cannot figure out a guaranteed way of doing that, so I work on probabilities and expectations.
livesoft wrote:I don't even know what VUG is, so I wouldn't get it. What made this pop into your head and bring it to forefront to make you want to post about it? What are your neurons actually doing?

Sorry this is off-topic but I wanted to say thank you for dedicating so much time and patience to helping new investors like the OP and myself. I was shocked by your post count and wondered what your neurons were actually doing when you decided to dedicate such a big part of your life to BH :mrgreen:
BIG THANKS!

livesoft
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Re: If i have VTI should I also get VUG?

Post by livesoft » Tue Jun 13, 2017 5:38 pm

I'm multi-tasking and keeping my typing skills sharp. I'm also avoiding walking the dog in 95 degree heat and 100% humidity.
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jbow44
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Re: If i have VTI should I also get VUG?

Post by jbow44 » Tue Jun 13, 2017 8:04 pm

I think the point here has been made perfectly clear.

To your original question, yes there is definite overlap and thus no reason to keep both. However, if you had an inclination that growth is best for you, simply go with VUG and none of VTI (although you can tell that's not the general recommendation, nor mine). Having said that, I own VUG's mutual fund version (VIGAX) in my 401k because it's the best large cap fund I have access to and have been quite pleased with it.

However, if more risk is what you're looking for, a better approach would be to stay with VTI and adjust your asset allocation to a more stock heavy portfolio or add small cap value to VTI (that's what I do in my Roth). That would be VBR.

MrNewEngland
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Re: If i have VTI should I also get VUG?

Post by MrNewEngland » Tue Jun 13, 2017 8:32 pm

VUG is over 7% Apple. I like Apple but that's a big concentration.

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