Total Stock Market Index vs. S&P Index with small cap

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cubsbank
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Total Stock Market Index vs. S&P Index with small cap

Post by cubsbank » Sun Jul 28, 2019 4:27 pm

Good evening Bogleheads. I was listening to the White Coat Investor and he kind of threw out a comment that made me think. He mentioned that he would recommend investing in a Total Stock Market Index over a S&P500 index. I have read on the forum the plus and minuses for this and it seems the over arching thought is that they essentially have the same performance. My question is that my current investing plan calls for 70% of my investing is in Stocks (remainder in Bonds and other fixed income). Of those stocks I have 30% in an S&P 500 index with 15% in Small Cap index (remainder in International). Am I essentially creating a Total Stock Market Index with this US stock allocation?

Thanks in advance.

mhalley
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Re: Total Stock Market Index vs. S&P Index with small cap

Post by mhalley » Sun Jul 28, 2019 4:29 pm

The ratio to approximate TSM is 82/18 of the stock portfolio. I guesss of your total portfolioo it would be .7 x that, or 57.4/12.6
https://www.bogleheads.org/wiki/Approxi ... ock_market

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asset_chaos
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Re: Total Stock Market Index vs. S&P Index with small cap

Post by asset_chaos » Sun Jul 28, 2019 7:07 pm

I recall that Vanguard's extended market index fund (I don't know the ticker) was created around the same time as total stock index fund and was meant explicitly for long time investors in the SP500 index fund who wanted to switch to total market but didn't want to have to pay big capital gains to sell out of one fund to buy into the other. So SP500 index plus extended market index equals total market, if held in the right proportion. While I believe the more diversified total stock market will be better, in some vague sense, than the SP500 index fund, I think the "betterness" will be marginal.
Regards, | | Guy

MotoTrojan
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Re: Total Stock Market Index vs. S&P Index with small cap

Post by MotoTrojan » Sun Jul 28, 2019 7:23 pm

Quite a bit of International, nice. I think your tilt is a bit on the extreme side, but not a major issue. In my core portfolio I am 55% Total US and then add 20% small-value, with the remaining 25% in International. I suppose I am not super far off from you given the small/mid-allocation in the Total US portion too.

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southerndoc
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Re: Total Stock Market Index vs. S&P Index with small cap

Post by southerndoc » Sun Jul 28, 2019 8:05 pm

You were listening to WCI? Does he have a podcast?

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Socrates
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Re: Total Stock Market Index vs. S&P Index with small cap

Post by Socrates » Sun Jul 28, 2019 8:14 pm

55% international???? :confused

Enjoy those returns......
“Don't waste your time looking back. You're not going that way.” ― Ragnar Lothbrok.

mhalley
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Re: Total Stock Market Index vs. S&P Index with small cap

Post by mhalley » Sun Jul 28, 2019 9:17 pm

Yes, WCI has a podcast. All the cool kids are doing it!

https://www.whitecoatinvestor.com/wci-podcast/

drk
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Re: Total Stock Market Index vs. S&P Index with small cap

Post by drk » Sun Jul 28, 2019 9:29 pm

Socrates wrote:
Sun Jul 28, 2019 8:14 pm
55% international?
You should reread the OP because you misunderstood. Even better, though, would be to only comment if you have an informative reply.

OP, your mix is a little overweight small caps, which is fine if that's what you intended. To approximate TSM, you'd want S&P 500 to small cap at a 4:1 ratio, or 36% and 9%, respectively.

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cubsbank
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Re: Total Stock Market Index vs. S&P Index with small cap

Post by cubsbank » Thu Nov 07, 2019 8:31 pm

Thank you

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cubsbank
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Re: Total Stock Market Index vs. S&P Index with small cap

Post by cubsbank » Thu Nov 07, 2019 8:33 pm

Thank you

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