Why not VIGAX (Growth) vs VFIAX (S&P500)

[imyeti2]

Hello,
Conventional wisdom says invest in S&P500 (VFIAX), set it and forget it. However, if you compare VIGAX (Growth index fund), it has consistently come out ahead in the last 20 years
Why not just go with VIGAX instead of VFIAX?

[tibbitts]

Hello,
Conventional wisdom says invest in S&P500 (VFIAX), set it and forget it. However, if you compare VIGAX (Growth index fund), it has consistently come out ahead in the last 20 years
Why not just go with VIGAX instead of VFIAX?

I don't know the answer but it seems like an obvious question: were you deciding 20 years ago, what would the performance of a growth vs. broad market index have been over the previous 20 years?

Maybe compare rolling 20-year periods over, say, the last forty or fifty years and see if the conclusion is the same?

[imyeti2]

I'd love to go back. Unfortunately, VIGAX opened in 2000.
Assuming the future will be dominated by AI and genomic, or some other new technology, it will be classified as growth. If I've to invest for the long term, say over the next 20-40 years, I think I'd be better off in VIGAX vs VFIAX.

[WeakOldGuy]

Hello,
Conventional wisdom says invest in S&P500 (VFIAX), set it and forget it. However, if you compare VIGAX (Growth index fund), it has consistently come out ahead in the last 20 years
Why not just go with VIGAX instead of VFIAX?

I don't agree with your premise. I think the BH "conventional wisdom" is to invest in a total US market index rather than the S&P500. At best I see the S&P500 as an acceptable "second best" choice.

[suemarkp]

I noticed the same thing 7 years ago, so I have a 10% tilt to growth (VIGAX and FSPGX). You never know when value will swap with growth. Using a blended fund mitigates that and is what Bogleheads preaches. However it seems these growth -vs- value and US -vs- International metrics seem to follow trends that last years. That may not always be the case, they could go choppy. Or it could reverse for a long time.

So I decided to follow these trends with a 10% growth tilt and a minimal international tilt.The harder question is when to get out or swap. This year, International may outperform US. I'm not going to react on one years performance. But if growth fades or International shines, I will change my allocations a bit.

[jdibber]

My equity positions are mostly 50/50 LCG and SCV (eg VUG/IWY and VIOV/AVUV). I believe the diversification is superior to Total US. Back test the LCG/SCV combo asset class over the last 50+ years compared to total US or S&P 500. Of course, the usual BH past performance disclaimer applies, and I tend to bleed value.

[Carol88888]

I tend to think that as soon as something in investing is obvious soon it will no longer be the case. Remember that after the dotcom bust of 2000, it took the QQQs 13 years to go positive. We could be approaching another such era at some point.

I'd probably recommend VTI or VOO. They may not be optimal but you know they won't be the worst choice.

[snailderby]

Historically, there have been significant time periods where value stocks have outperformed growth stocks. The fact that growth stocks have outperformed value stocks recently doesn't mean they will necessarily continue to outperform in the future.

Tech stocks may have a bright future. But how much of that expectation has already been priced in by the market?

[secondopinion]

I'd love to go back. Unfortunately, VIGAX opened in 2000.
Assuming the future will be dominated by AI and genomic, or some other new technology, it will be classified as growth. If I've to invest for the long term, say over the next 20-40 years, I think I'd be better off in VIGAX vs VFIAX.

I rather invest in something that makes money over investing in the “future” as the “future” does not have to pay the investor well.

[Lawrence of Suburbia]

Recency bias screams that growth is the obvious way to go.

But, is that really a good idea? ...

Value is the threadbare, poor sibling of growth. But history strongly suggests its day will come again. With my luck, it would happen right after I plowed everything into the growth fund.

[climber2020]

Give this entire thread a read and ask yourself how it’s any different than what you propose. Note the exact date the thread was started and the comical nature of what transpired after.

Why the disdain for managed funds like ARKK that destroy total market funds?