At the end of the day, S&P 500 averages 10% a year over the long term. Could I do better than that? Sure. Am I comfortable with a 10% average return? Definitely.
Great video. That’s why I’ll continue investing in global all cap. The global all cap is very similar to the S&P500 anyway. I also allocate a very small percentage to VHYL and a UK dividend index fund
Yep. Other places might do a little better, or not.. but chances are you will do pretty well with theS&P500, No need to overthink, just keep buying and chilling.
@@gothops2632basically yes, but time in the market beats timing the market. Just buy consistently at the beginning of every month (cost average effect) and you'll be fine 🙂
I believe investors should start with S&P 500/ETFs for a solid foundation, then diversify across asset classes and maintain disciplined, regular investing to minimize risks and maximize growth.
For someone starting with $200k, begin with S&P 500 ETFs, diversify across asset classes, and invest consistently to minimize risks and maximize growth. Partnering with a financial advisor can help streamline your strategy. This approach turned $80k into $53,000 in annual dividends.
Sure, Melissa Elise Robinson is the licensed advisor I use. Just look up her name online, and you'll find all the details you need to set up an appointment.
your videos are always so clear and concise, really helps someone like me with very little life experience to understand investing and the bigger picture!
I completely agree, which is why I'm 100% in VEVE (FTSE Developed World UCITS ETF). Still has like a 70% allocation to the US, so you're still getting a pretty heavy weighting to the US market, but you get a little bit of world diversification too. VEVE and chill. 😎
Some would argue that even though the S&P500 is based in the US, they are global companies. Look how much influence the top 10 have in the uk- All of us have an apple device, Microsoft laptop with a Nvidia processor ordered off Amazon etc. I wonder what the percentage of presence of US based companies is around the world? And let’s not forget get about those fees! 0.21% for your global index fund? Not exactly 0.07% for VUSA.
I'm 60% FTSE and 40% s&p and in year five of drawdown. My move into s&p was only in 2022, my first change in strategy for 24 years. I'm not really a chop and change kinda guy
I must say I love dividend investing, getting those payments in for just holding a company is amazing. from what I've witnessed it all comes down to having a Licensed investment Adviser to handle your portfolio. All thanks to mine, who has traded my savings daily from quarter a million to almost one million dollars in the last 9 months.❤✅
Amazing ! I have Liquid $150K to put into stocks, but I want to ensure good profits & safety. With tons of Advisors now, how did you find the right Investment Advisory?
WOOW !! Essmildaa Morgan is finally getting the popularity she deserves and this docent come as a surprise. my favorite stocks She invest in are Amazon,Walmart, TELSA and currently, Crowdstrike.
You can’t go wrong either way. The S@P 500 is one of the old reliable funds. Like an old Cummings diesel dodge it is not the fastest or fanciest, but it sure gets you where you are going and it is still running when many others are failing.
I have all my money one fund, VTSAX and I am comfortable with my decision. Even Jack Bogle even said that if you are invested in the top companies in the US you are automatically invested globally.
S&P has given fantastic returns and everyone quotes the 10% figure. But take a look at the decade after 2000. The index went down. That may not be a problem for many people but I wonder if the internet would be full of people promoting the S&P500 if we had just had a decade like that? Most of my investment is global.
The beauty of a tax free wrapper (such as a UK ISA), is that you can jump horses with no tax penalty. So within my ISA I ride the fastest horses (at the moment like tech ETFs, EQQQ, IUCM, IITU, etc.). If a few top tech companies suddenly have a correction and the ETFs don't look so strong, I can sell a proportion or all and switch to a global ETF (e.g. SWDA) or emerging market ETF (e.g. EMSM) or even physical gold (SGLN) with no CGT penalties. It does mean that I need to check the portfolio every day though. For my GIA, I just stick with global index tracker plus a few more risky ones because if the risky ones cause a loss, I can factor this in to any other gains and at least it helps the CGT figure at the end of the tax year (when I sell 20K to move into the ISA). Not sure if this is good practise or not, but I somehow can't stand spreading my 'bets' out on all the horses in the race, knowing that many horses will fall or only walk across the line by tea time when I can simply bet on the favourites!
@@RandomUser-100 There is little point in having a GIA unless you first max out your ISA (and maybe add into your SIPP too). CGT is 10% - only 20% for high rate tax payers (50K+ income). Trading 212 gives you 5.2% even if you just hold it as cash. This means you can just let it sit there getting 5.2% and then buy stocks with it when you think the price has dipped enough. EQQQ is top NASDAQ 100 (approx 50% tech), IITU is 100% S&P 500 tech stocks only. So EQQQ is hit less if/when tech bubble bursts. So if you think tech price is peaking (like in last 2 days) you could sell IITU inside your ISA and buy EQQQ or even SWDA so if tech stocks do then suffer a correction, you still have 50% or 70% in non-tech stocks. But i'm not an expert!
Great video, Toby! Been wondering about this topic for a while. Thought the Hartford chart on US v International cycles was particularly insightful. Happy investing! ✌🏼
Point well made. The law of averages says the US must be due a period of under performance at some point. Given the valuation difference between the US and elsewhere, I think that under performance is imminent. Consequently, my own portfolio is underweight US.
Vanguard, Fidelity, Schwab, etc have been predicting that International would beat the US for the last 10+ years. The opposite has happened. One thing is for sure, if you own a globally diversified portfolio, you will never get caught holding the loser.
@@PassivePortfolios They underestimated the US's ability to deficit spend to the point of insanity. Unfortunately, because of interest rates we are now due for a debt catastrophe at some point in the next 10 to 15 years
@@nicolasgirard2808 most of our debt is owed to ourselves and it is dollar denominated so no catastrophe. If the debt was unsustainable and in danger of default, the yields necessary to attract investors would have to increase significantly.
I've said it before and I'll say it again. Fantastic video as always mate. Thank you for putting out these great investing videos for all of us to enjoy. They've helped so much!
I'm tapering down the US and buying emerging markets as suggested by Vanguard and everyone else who understands prices. Better chance not to loose money in the next 20 years
I don't just invest in the S&P 500 for two reasons, the first you covered in this video, but the second is more about money and equity distribution. If people only invest in a certain region it means that region is a lot more likely to grow than other regions, so it stymes other countries and regions growth if more only goes to the US.
Very interesting topic Toby. I've been buying the S&P500 for quite some time now but felt a bit uneasy missing out on the rest of the world so have recently started a position with VWRL also. I know there is quite a bit of overlap but I'm happy with that.
You are right, you need a wider spread, I do this, I have a pie, with s&p 500, FTSE Global All Cap and bonds (with small % of emerging, develp and gold) so far I'm 15% up, I've no idea what the future will bring, but think this covers most bases, lived though '2 crashes, shown me that no one is too big to fail, it's all a gamble, so I like to spread my bets.
I have an 11YO who we put in the following core index funds: VB, VO, VOO and VXUS in equal proportion. Large cap US isn’t going to outperform forever and it’s a very long term portfolio.
Great content mate. Shining light on the weight of the SP500 in the total global economy is eye opening. No doubt the channel will grow quickly. Best wishes from Brazil.
I have a pie on 212 with a few ETFs, 30% is All World, then 25% S&P500, 20% S&P500 IT, 10% Semiconductor, 10% Defense, and 5% AI - gives me a good mix but mostly invested in S&P 500 companies, just stacked more towards Tech - also average fee total around 0.21% so not bad
Yeah, I would consider the whole economy when it comes to investing. Not just the S&P 500. Include them, and the rest. Allied international stocks, too. That way, your risk is mitigated through diversification in case one sector or two heads south when the world is under bearish times.
But you didn’t comment on the fact that many of the S&P stocks are GLOBAL stocks. So in fact you are investing outside the US. You don’t need to be 100% invested in the World.
I’m not sure you watched the whole video 😎. Yes they sell globally…but guess what so do many other companies who are not listed in the US….the UK market is a good example the largest companies on the FTSE 100 make most of their money internationally too
Be investing since 1986 - now buying FWRG - but majority of my investments are in the UK to avoid the exchange rate fluctuations and I understand the market better, do also on occasion buy BULL:USD ETF but don't have any currently my Average return since 2008 (10.65%) but it is volatile Date Returns 31 Jan 2008 34.66% 31 Jan 2009 16.35% 31 Jan 2010 15.84% 31 Jan 2011 60.77% 31 Jan 2012 5.05% 31 Jan 2013 12.36% 31 Jan 2014 9.44% 31 Jan 2015 17.68% 31 Jan 2016 -1.59% 31 Jan 2017 27.32% 31 Jan 2018 25.71% 31 Jan 2019 -0.86% 31 Jan 2020 22.15% 31 Jan 2021 9.62% 31 Jan 2022 17.18% 31 Jan 2023 1.59% 31 Jan 2024 6.36%
I started investing globally about 2 months ago and I think it's a safer bet in the long run. I'm still putting most into s&p but small amounts are better than nothing
Us based here. You have to be careful from the inverted demographics of country’s like Japan, Germany, etc. US and Australia are the countries with the buyers
Most of the QQQ is in VGT. VGT is a lot cheaper to hold with same performance. That said it is part of my 3 ETF portfolio. VEA (non US), VOO (S&P 500), and VGT
I will only invest in my country. The United States of America. I have zero interest in foreign investments. The s&p 500 is safe and a consistent earner. SPLG or VOO is all I will ever need. >12 percent currently and earns more then 85% of financial advisors period
Try Bill Bernstein's "No Brainer Portfolio" - US Large Cap index, Small Cap index, Developed Markets index and Short Term Treasury (or can use short term Treasury ladder).
The graph showing when the US or the rest ot the world performs best has linear transitions from one to the other so you can draw a pretty good trend line to when the better performance will swap over. Looks like we have a few years left of the US performing better as the trend line is slowly heading towards the x axis.
You are 100% right. But in the long run speaking (30 ) years. as a young man Lets say 20 it isnt a bad decision. The very large companys wont go bankrupt generally speaking and your money Will drop and go up but these companys wil go up in 30 years so it Will most likely be profitable maybe not always 10% but I dont think it wil go down in that large of a time frame. Same with gold, gold is a mineral that we will run out of. which means it will go up just as all the minerals, but at what time span Thats the real question in my opinion.
Going for an All World fund because I will find it easier to stick with long term. Still has a big cross over with the S&P in there but also get rest of the world and developing markets. I was considering factor investing but I want to keep it simple.
Wait for the next phase of outperformance of another index and many will say that it would be good to add it. The sp500 is at least more expensive than the historical average and almost all other regions and small caps are cheaper. Perhaps a good opportunity. Even the sp500 excluding big tech is necessarily expensive if you look at the development of the sp500 equal weight
I have benefitted so far with the UK stocks rallying but still own a global index fund to cover all bases which includes our American cousins. I have dabbled in a purely emerging markets fund so will see how that goes over the next couple of years.
I’m curious, and this might be a good start for a future video: the first 10 company on the SP500 beat the 10% over the last 10 years? And what about the first 50 or the first 100?
Over the long run only around 3-6% of all companies have managed to produce the majority of all of the returns in the market: it’s extremely difficult to predict…I’d say impossible. I have covered it in many previous videos 😎
@@TobyNewbatt I will said that on the first 10 company is to little for the long run, I’m sure that on the first 10 company a few of them didn’t exist 10 years ago, but a SP50 or SP100 I think can deliver a better result. I think that all the others are there for contingency, but if i would play to beat the SP500 I will just take the first 50.
Interesting video. The issue i have with the thesis is that these us companies may be us based, but they are global. I live in nz, and we still all buy apple phones, Microsoft for our pcs, nike for our shoes, coke for drinks, amazon for... everything.... In order for an emerging market to give good growth the new company has to dominate those brands. Its possible, but how likely? When i buy into the s and p 500 i am comfortable with global diversity because these businesses are actually global
Companies based outside of the US are also global and international though so just be wary of that simplified argument 😎 I agree though all the emerging markets will be great customers for the big companies in the US anyway it’s win win 💪💪 TSMC, LVMH, Shell, BP, you name it are all based outside of the states 👍
Global diversification is a "hedge" (partial, I admit, given the dominance of US constituents in global indexes) against a black swan showing up in the US of A. However, in all likelihood, we'd make more by focusing solely on the S&P (given past performance and global dominance of certain US corps), but take the aforementioned risk. No right or wrong here. A globally diversified ETF costs more, that's the only certain fact... but the added cost can be negligible. The cheapest S&P I can get has 0.03% TER, the cheapest ETF diversified over all developed nations and over large and mid caps (currently 1,469 constituents) costs only 0.05% TER. So I chose the global ETF and buy the diversifaction for 2 basis points.
The S&P500 is very heavy on US tech stocks and as such I think it represents a poorly diversified portfolio. A World Portfolio at least provides a little insulation to that.
Yes it is Danger when all of the People Tell you to Invest into one thing sure many Companies but if some want to go Bust all the People will feel it. Rather Stay out or Buy A little 15% every year from all around the Stocks you own?
For Me I did not Invest Into it because I Rather Like to have Companies what work on their own and do not Have such a System where they can be Kicked out of the SP 500 for not making enough connections with People you do not need another Big Boss over your Company so stay out of the SP 500.
I got just one ETF and that is VT(Vanguard Total global share market) and I am covered the entire world stock market. $75 per day automatic investment. Set and chill!
I am UK based. It would be nice to know what % of earnings from the All Cap we recieve from each region. That will give us a real insight on how diverse the world really is. My AllCap goes up hughly whenever the US does well. I have no other knowledge of the other markets.
most Allcap is build by market cap and does balance itself out automaticly. If you go to a side that provide information on the index in question you should be able to find an overview on how the index is split between counties. That shows the was its split across regions. Spoiler warning with the extremly high flying US companies the world market cap is like 70% in the US right now
QQQ? Even better is to mix 20% TQQQ into your portfolio to boost returns and rebalance every year so you're selling when it's high and buying when it's low.
Ive gone VWRP for the children as i want them to be more diversified and I'm sticking with the S&P 500. The geopolitical situation outside of the US is so volatile, I can't a situation where the rest of the world outperforms the US, but who really knows. I may allocate some funds into emerging markets in the future.
Honestly, ever since the collapse of the USSR we have been in a state of deglobalization. Would not be surprised if the United States brings back a TON of blue collar work with automation. Only reason why we helped so much of the international world was to stop the communist threat. Now the only communist threat is China who is capitalist but kept the name for namesake. I expect the s and p 500 to continue growth in the next 60 years at least. The geopolitical situation has changed to make the US primed to be on top because Europe and a lot of Asia is rapidly aging beyond replacement and takes in little immigrants.
From my view, I can endure less return on U.S.(or U.K.) market since is the safest place to put my money, rather than investing all world ETF which partially invested in Russia and went to zero after the war of Ukraine.
@@pyli535 I see a lot more civil wars and coup’s in the future. The United States is the most stable. We have the most and diverse natural resources than most of the world. We have two neighbors who we are on great terms with. We are divided by two oceans from everyone else, we have the largest navy to secure it. We already are the center for innovation and most of the worlds wealth is in the United States.
Globalization was not some government policy driven by the threat of the USSR. It was done by corporations seeking to minimize costs. But a corporation seeking to minimize costs could also just take the automation technology to a country with cheaper labor, weaker labor rules, and decent/stable institutions and build their factories there. I agree that since the pandemic there has been a push to shorten and simplify new supply chains, but a lot of that has been moving production lines out of a dozen countries and concentrating it in a few and moving some production from China to Mexico, and Vietnam. People have been predicting the reascendence of US manufacturing for decades and the sad fact of the matter is that imports are just too cheap for that to really work without super high levels of protectionism (the strong US dollar being one factor).
US is a concentration, too volatile and it’s recency bias. Sometimes you have to bet on the losers too. If it all goes wrong and I’m on Dave Ramsey baby step 1 with the bowls of rice, I can at least tell myself I didn’t take too many risks by having something like sp500.
As someone who’s just got into this mind field of trading, I’m doing my research first and it’s been nothing short of mind blowing on how much there is to learn but I’m seeing trends already
I would have to ask how much better the international markets perform compared to the US market (or S&P 500) and is it really worth moving my money out of the S&P 500. Besides if one is invested in U.S. based multinational companies, they are invested internationally.
the US market is going well and likely will keep on going well but i do agree many of the largest caps feel like they have reached such a great extent they stuggle to produce further growth other by cranking up the price. Everyone already has some facebook platform, everyone has a microsoft pc, most people that want a overpriced handy already have them. Mc Donalds cranks up their price and then slowly realises the total revenue does not go up due to them pricing people out of its products. SP500 in the end is a national and nowadays a sector bet and therfore automaticly has a higher risk associated with it. Some further diversification like starting with an all world etf or Msci world has less risk. Those with already a lot of SP500 on the other hand should think about adding in some emerging markets etfs by switching the new aquisition money into buying those. To me they feel fairy well priced.
Yeah I always say this when my friend asks why my S&P weighting is so high, the top companies in there are essentially global companies despite being labelled as US stocks
I don’t get what all the fuss is about. Most global funds are weighted heavily to the US anyway meaning you’re going to feel the same bumps in the road as the S&P then pay higher fees for less gain.
You could always go for *less performance* (total return) by investing in "broader" indices than the S&P 500. But why? Give me an example when the US economy was competely devastated and at the same time revenues as well as profits of large / mid / small companies in developed / emerging countries went through the roof. And non US companies could refinance at lower cost. 😅 Then spend a minute or two to reflect what made the ... top50 companies in the S&P 500 that successful resp. dominating, in their home turf as well as internationally. Assertiveness? Colleges (fostering start-ups)? Innovations? Venture capital? Business models? Focus on growth (and int'l biz)? Labor unions and strong labor laws or the oppostite? 😊 Well, biz models. The rest of the world, particularly the U.K. and Europe, still favors "traditional" biz models. The US is ahead, with data-driven bizmo's and first biz relevant AI implementations. 🎉
So I'm 50 years old (dammit!) - and 've got about 16 years left to invest - I'm starting with about 30k - and am planning to put £500 away per month - is it worth it?
If you're still young, no, you don't. I've been hearing the emerging markets argument for decades. They continue to be trash. The S&P 500 companies are mostly multi national anyway.
Thanks for your informative video. Its really helpful for investment. Would you please guide me where to buy Invesco QQQ trust fund? it is not available under HL funds list. Please advise.
Just interested to know Toby has your views on your investment strategy changed over the past few years? Ie did you swap over from VUSA to global all cap?
If I had not bought 20k worth of s and p 500 2 years ago And instead just bought say 2500 pounds worth into each of the magnificent 7 I’d have made far more money
@@1greener it’s not easy to beat the s and p But what I mean is say pic a year Say 2017 as example I wonder if the s and p 500 did better than if someone just bought shares in the top 10 companies in the s and p ???
Yeah and if my auntie had balls she’d be my uncle! You can’t look back and think like this, nobody knows which specific stocks are going to do best, that’s why we index…
Im 50% S&P 50% VWRP. That’ll do for me for a while. Set and forget. Simple investing. There might be better out there but I can’t be bothered faffing about.
Great question! So they sell their research and their indexes under a license fee. So basically anytime you create an etf and get investors into it they will take a small cut of that money for the license!
At the end of the day, S&P 500 averages 10% a year over the long term. Could I do better than that? Sure. Am I comfortable with a 10% average return? Definitely.
You probably couldn’t do better than that. Most hedge fund managers underperform the S&P 500.
@@joshr920 actually you can with just QQQ + SMH
What would do better than 10% in the long run?
I was ALL IN in TSLA for 4 years. Now switched to QQQ and SPY feels good to make predictable returns :D
Great video.
That’s why I’ll continue investing in global all cap. The global all cap is very similar to the S&P500 anyway.
I also allocate a very small percentage to VHYL and a UK dividend index fund
Median 30 year rolling return of S&P500 is apx 10%. Just keep buying into it, through high and low, and you will do great
Yep. Other places might do a little better, or not.. but chances are you will do pretty well with theS&P500,
No need to overthink, just keep buying and chilling.
Would it not be best to buy more during periods when it's low and less when it's high?
@@gothops2632basically yes, but time in the market beats timing the market. Just buy consistently at the beginning of every month (cost average effect) and you'll be fine 🙂
I have around $200k in a HYSA and want to invest. What are the best opportunities now?
I believe investors should start with S&P 500/ETFs for a solid foundation, then diversify across asset classes and maintain disciplined, regular investing to minimize risks and maximize growth.
For someone starting with $200k, begin with S&P 500 ETFs, diversify across asset classes, and invest consistently to minimize risks and maximize growth. Partnering with a financial advisor can help streamline your strategy. This approach turned $80k into $53,000 in annual dividends.
I've been considering getting one, but haven't been proactive about it. Can you recommend your advis0r? I could really use some assistance.
Sure, Melissa Elise Robinson is the licensed advisor I use. Just look up her name online, and you'll find all the details you need to set up an appointment.
I looked up her name online and found her page. I emailed and made an appointment to talk with her. Thanks for the tip
your videos are always so clear and concise, really helps someone like me with very little life experience to understand investing and the bigger picture!
I completely agree, which is why I'm 100% in VEVE (FTSE Developed World UCITS ETF). Still has like a 70% allocation to the US, so you're still getting a pretty heavy weighting to the US market, but you get a little bit of world diversification too. VEVE and chill. 😎
Some would argue that even though the S&P500 is based in the US, they are global companies. Look how much influence the top 10 have in the uk- All of us have an apple device, Microsoft laptop with a Nvidia processor ordered off Amazon etc.
I wonder what the percentage of presence of US based companies is around the world?
And let’s not forget get about those fees! 0.21% for your global index fund? Not exactly 0.07% for VUSA.
Oh 100% Lewis there's lots of food for thought in this discussion. It really all depends on how much is priced in!
global companies, but still regulated by a single government body. one not-so-great legislation and all of them could feel the impact.
100% agree. And the US is likely the best country in the world for a business to operate from. It's the capital of capitalism lol.
I'm 60% FTSE and 40% s&p and in year five of drawdown.
My move into s&p was only in 2022, my first change in strategy for 24 years.
I'm not really a chop and change kinda guy
a&p you mean s&p ?
I must say I love dividend investing, getting those payments in for just holding a company is amazing. from what I've witnessed it all comes down to having a Licensed investment Adviser to handle your portfolio. All thanks to mine, who has traded my savings daily from quarter a million to almost one million dollars in the last 9 months.❤✅
Amazing ! I have Liquid $150K to put into stocks, but I want to ensure good profits & safety. With tons of Advisors now, how did you find the right Investment Advisory?
Essmildaa Morgan is well known, just look her up.
Holy Smokes, congratulations !
WOOW !! Essmildaa Morgan is finally getting the popularity she deserves and this docent come as a surprise. my favorite stocks She invest in are Amazon,Walmart, TELSA and currently, Crowdstrike.
It's pretty dumb to pay for an advisor.
You can’t go wrong either way. The S@P 500 is one of the old reliable funds. Like an old Cummings diesel dodge it is not the fastest or fanciest, but it sure gets you where you are going and it is still running when many others are failing.
Using a Dodge as an analogy for reliability is insane lmao
I have all my money one fund, VTSAX and I am comfortable with my decision. Even Jack Bogle even said that if you are invested in the top companies in the US you are automatically invested globally.
But policy change can ruin it , therefore more risky than global
S&P has given fantastic returns and everyone quotes the 10% figure. But take a look at the decade after 2000. The index went down. That may not be a problem for many people but I wonder if the internet would be full of people promoting the S&P500 if we had just had a decade like that? Most of my investment is global.
The beauty of a tax free wrapper (such as a UK ISA), is that you can jump horses with no tax penalty. So within my ISA I ride the fastest horses (at the moment like tech ETFs, EQQQ, IUCM, IITU, etc.). If a few top tech companies suddenly have a correction and the ETFs don't look so strong, I can sell a proportion or all and switch to a global ETF (e.g. SWDA) or emerging market ETF (e.g. EMSM) or even physical gold (SGLN) with no CGT penalties. It does mean that I need to check the portfolio every day though. For my GIA, I just stick with global index tracker plus a few more risky ones because if the risky ones cause a loss, I can factor this in to any other gains and at least it helps the CGT figure at the end of the tax year (when I sell 20K to move into the ISA). Not sure if this is good practise or not, but I somehow can't stand spreading my 'bets' out on all the horses in the race, knowing that many horses will fall or only walk across the line by tea time when I can simply bet on the favourites!
@@RandomUser-100 There is little point in having a GIA unless you first max out your ISA (and maybe add into your SIPP too). CGT is 10% - only 20% for high rate tax payers (50K+ income). Trading 212 gives you 5.2% even if you just hold it as cash. This means you can just let it sit there getting 5.2% and then buy stocks with it when you think the price has dipped enough. EQQQ is top NASDAQ 100 (approx 50% tech), IITU is 100% S&P 500 tech stocks only. So EQQQ is hit less if/when tech bubble bursts. So if you think tech price is peaking (like in last 2 days) you could sell IITU inside your ISA and buy EQQQ or even SWDA so if tech stocks do then suffer a correction, you still have 50% or 70% in non-tech stocks. But i'm not an expert!
@Toby, I think you’ve done such a good job on this video the way the comments are divided with s&p vs a global etf!! 😂
It's a great topic - food for thought to get people's brains going :P
As an European i like global etfs like VWCE because i dont have to stress over and will hold for decades for retirement
Great video, Toby! Been wondering about this topic for a while. Thought the Hartford chart on US v International cycles was particularly insightful. Happy investing! ✌🏼
Great videos, I love the focus on history, a sign of wisdom.
Point well made. The law of averages says the US must be due a period of under performance at some point. Given the valuation difference between the US and elsewhere, I think that under performance is imminent. Consequently, my own portfolio is underweight US.
Vanguard, Fidelity, Schwab, etc have been predicting that International would beat the US for the last 10+ years. The opposite has happened. One thing is for sure, if you own a globally diversified portfolio, you will never get caught holding the loser.
@@PassivePortfolios They underestimated the US's ability to deficit spend to the point of insanity. Unfortunately, because of interest rates we are now due for a debt catastrophe at some point in the next 10 to 15 years
@@nicolasgirard2808 most of our debt is owed to ourselves and it is dollar denominated so no catastrophe. If the debt was unsustainable and in danger of default, the yields necessary to attract investors would have to increase significantly.
I've said it before and I'll say it again. Fantastic video as always mate. Thank you for putting out these great investing videos for all of us to enjoy. They've helped so much!
I'm tapering down the US and buying emerging markets as suggested by Vanguard and everyone else who understands prices. Better chance not to loose money in the next 20 years
100% VUAG it occasionally outperforms the S&P 500 and beats VUSA
I don't just invest in the S&P 500 for two reasons, the first you covered in this video, but the second is more about money and equity distribution. If people only invest in a certain region it means that region is a lot more likely to grow than other regions, so it stymes other countries and regions growth if more only goes to the US.
Your money is like a drop of water in the ocean. Not investing in it won’t make any difference.
Very interesting topic Toby. I've been buying the S&P500 for quite some time now but felt a bit uneasy missing out on the rest of the world so have recently started a position with VWRL also. I know there is quite a bit of overlap but I'm happy with that.
I'm 90% VWRL and 10% IITU. An absolute beginner but doing well so far.
@@hustlinhitchur not a beginner. Ur very smart to be in index funds. Smarter then 90% of investors
US stocks are generally overpriced. I’m invested in globally diversified funds roughly weighted in proportion of the global market caps
How would you really know that all US stocks are overpriced??Your just an index investor.
You are right, you need a wider spread, I do this, I have a pie, with s&p 500, FTSE Global All Cap and bonds (with small % of emerging, develp and gold) so far I'm 15% up, I've no idea what the future will bring, but think this covers most bases, lived though '2 crashes, shown me that no one is too big to fail, it's all a gamble, so I like to spread my bets.
Last SNP drop from 2003 to 2011 like your graph shows had good years, like 2004. +9%, 2013 + 13%, 2009 + 23%, 2010 + 12%.
I have an 11YO who we put in the following core index funds: VB, VO, VOO and VXUS in equal proportion. Large cap US isn’t going to outperform forever and it’s a very long term portfolio.
Great content mate. Shining light on the weight of the SP500 in the total global economy is eye opening. No doubt the channel will grow quickly. Best wishes from Brazil.
Much appreciated
I have a pie on 212 with a few ETFs, 30% is All World, then 25% S&P500, 20% S&P500 IT, 10% Semiconductor, 10% Defense, and 5% AI - gives me a good mix but mostly invested in S&P 500 companies, just stacked more towards Tech - also average fee total around 0.21% so not bad
defence? how do you sleep at night🤮🤮
@jojo3033 Thanks to our defense capabilities, funnily enough 😉
Yeah, I would consider the whole economy when it comes to investing. Not just the S&P 500. Include them, and the rest. Allied international stocks, too. That way, your risk is mitigated through diversification in case one sector or two heads south when the world is under bearish times.
The low fees and low dividend taxes make it a great option for a US investor.
But you didn’t comment on the fact that many of the S&P stocks are GLOBAL stocks. So in fact you are investing outside the US. You don’t need to be 100% invested in the World.
I’m not sure you watched the whole video 😎. Yes they sell globally…but guess what so do many other companies who are not listed in the US….the UK market is a good example the largest companies on the FTSE 100 make most of their money internationally too
Be investing since 1986 - now buying FWRG - but majority of my investments are in the UK to avoid the exchange rate fluctuations and I understand the market better, do also on occasion buy BULL:USD ETF but don't have any currently my Average return since 2008 (10.65%) but it is volatile
Date Returns
31 Jan 2008 34.66%
31 Jan 2009 16.35%
31 Jan 2010 15.84%
31 Jan 2011 60.77%
31 Jan 2012 5.05%
31 Jan 2013 12.36%
31 Jan 2014 9.44%
31 Jan 2015 17.68%
31 Jan 2016 -1.59%
31 Jan 2017 27.32%
31 Jan 2018 25.71%
31 Jan 2019 -0.86%
31 Jan 2020 22.15%
31 Jan 2021 9.62%
31 Jan 2022 17.18%
31 Jan 2023 1.59%
31 Jan 2024 6.36%
Nice getting 60% in 2011!
I started investing globally about 2 months ago and I think it's a safer bet in the long run. I'm still putting most into s&p but small amounts are better than nothing
Us based here. You have to be careful from the inverted demographics of country’s like Japan, Germany, etc. US and Australia are the countries with the buyers
Most of the QQQ is in VGT. VGT is a lot cheaper to hold with same performance. That said it is part of my 3 ETF portfolio. VEA (non US), VOO (S&P 500), and VGT
Great video ive brought VUSA & VEVE both performing really well in vanguard portfolio
I will only invest in my country. The United States of America. I have zero interest in foreign investments. The s&p 500 is safe and a consistent earner. SPLG or VOO is all I will ever need. >12 percent currently and earns more then 85% of financial advisors period
A rather small minded attitude, but good luck to you mate.
Great video, I didn't know there was a committee in the mix, interesting:)
Try Bill Bernstein's "No Brainer Portfolio" - US Large Cap index, Small Cap index, Developed Markets index and Short Term Treasury (or can use short term Treasury ladder).
The graph showing when the US or the rest ot the world performs best has linear transitions from one to the other so you can draw a pretty good trend line to when the better performance will swap over. Looks like we have a few years left of the US performing better as the trend line is slowly heading towards the x axis.
S&P 500
Nasdaq 100
Nifty 50 (Indian index)
You are 100% right.
But in the long run speaking (30 ) years. as a young man Lets say 20 it isnt a bad decision.
The very large companys wont go bankrupt generally speaking and your money Will drop and go up but these companys wil go up in 30 years so it Will most likely be profitable maybe not always 10% but I dont think it wil go down in that large of a time frame. Same with gold, gold is a mineral that we will run out of. which means it will go up just as all the minerals, but at what time span Thats the real question in my opinion.
Ha, VWRL for life!
💪
Why not vwrp ?
It all makes sense to me. And budding investors need to hear this too. Good info in there
informative video as usual.. got developed world and emerging market on 90/10 i think it covers pretty much every country. quite happy with that.
Going for an All World fund because I will find it easier to stick with long term. Still has a big cross over with the S&P in there but also get rest of the world and developing markets. I was considering factor investing but I want to keep it simple.
Wait for the next phase of outperformance of another index and many will say that it would be good to add it.
The sp500 is at least more expensive than the historical average and almost all other regions and small caps are cheaper. Perhaps a good opportunity.
Even the sp500 excluding big tech is necessarily expensive if you look at the development of the sp500 equal weight
I have benefitted so far with the UK stocks rallying but still own a global index fund to cover all bases which includes our American cousins. I have dabbled in a purely emerging markets fund so will see how that goes over the next couple of years.
90% developed world and 10% EM for me. Happy enough strategy knowing I'm covering all grounds
I’m curious, and this might be a good start for a future video: the first 10 company on the SP500 beat the 10% over the last 10 years? And what about the first 50 or the first 100?
Over the long run only around 3-6% of all companies have managed to produce the majority of all of the returns in the market: it’s extremely difficult to predict…I’d say impossible. I have covered it in many previous videos 😎
@@TobyNewbatt I will said that on the first 10 company is to little for the long run, I’m sure that on the first 10 company a few of them didn’t exist 10 years ago, but a SP50 or SP100 I think can deliver a better result. I think that all the others are there for contingency, but if i would play to beat the SP500 I will just take the first 50.
Im S&P500 65% & XLKQ 35%. Was world but moved to USA only 6 months ago.
Interesting video. The issue i have with the thesis is that these us companies may be us based, but they are global. I live in nz, and we still all buy apple phones, Microsoft for our pcs, nike for our shoes, coke for drinks, amazon for... everything.... In order for an emerging market to give good growth the new company has to dominate those brands. Its possible, but how likely? When i buy into the s and p 500 i am comfortable with global diversity because these businesses are actually global
Companies based outside of the US are also global and international though so just be wary of that simplified argument 😎
I agree though all the emerging markets will be great customers for the big companies in the US anyway it’s win win 💪💪
TSMC, LVMH, Shell, BP, you name it are all based outside of the states 👍
Global diversification is a "hedge" (partial, I admit, given the dominance of US constituents in global indexes) against a black swan showing up in the US of A. However, in all likelihood, we'd make more by focusing solely on the S&P (given past performance and global dominance of certain US corps), but take the aforementioned risk. No right or wrong here.
A globally diversified ETF costs more, that's the only certain fact... but the added cost can be negligible. The cheapest S&P I can get has 0.03% TER, the cheapest ETF diversified over all developed nations and over large and mid caps (currently 1,469 constituents) costs only 0.05% TER. So I chose the global ETF and buy the diversifaction for 2 basis points.
The S&P500 is very heavy on US tech stocks and as such I think it represents a poorly diversified portfolio. A World Portfolio at least provides a little insulation to that.
Can add Value index to S&P 500 index to dilute the tech sector exposure.
Iv got VWRP ❤
Me too! Plus add in a little VUAG and VHYL 😎
Isnt it possible that it is just low interest rates that have driven S&P500 to crazy heights and this will not be the case going forward?
The s and p have had exceptionally good last few years
But I’m sure it may drop off in percentage growth per year , after 20 and 30 percent years
Not just low interest rates but QE in general. They started QE after 08, which is roughly just before s&p started sky rocketing
Yes it is Danger when all of the People Tell you to Invest into one thing sure many Companies but if some want to go Bust all the People will feel it. Rather Stay out or Buy A little 15% every year from all around the Stocks you own?
For Me I did not Invest Into it because I Rather Like to have Companies what work on their own and do not Have such a System where they can be Kicked out of the SP 500 for not making enough connections with People you do not need another Big Boss over your Company so stay out of the SP 500.
Or Invest but Little By Little and the Rest are other Stocks
I got just one ETF and that is VT(Vanguard Total global share market) and I am covered the entire world stock market. $75 per day automatic investment. Set and chill!
I am UK based. It would be nice to know what % of earnings from the All Cap we recieve from each region. That will give us a real insight on how diverse the world really is. My AllCap goes up hughly whenever the US does well. I have no other knowledge of the other markets.
The safest strategy is to own global index and the safest bonds you can buy. That way you don't have to try to guess the winners and the losers.
most Allcap is build by market cap and does balance itself out automaticly. If you go to a side that provide information on the index in question you should be able to find an overview on how the index is split between counties. That shows the was its split across regions. Spoiler warning with the extremly high flying US companies the world market cap is like 70% in the US right now
UK is like 4% of the worlds market cap, its mostly some banks and legacy companies left in there.
Thank you so much TOBY.❤
Thank you!
QQQ? Even better is to mix 20% TQQQ into your portfolio to boost returns and rebalance every year so you're selling when it's high and buying when it's low.
VOO and chill!
Global ETFs I see all seem to hold 73% of US market, so you are only missing out on 27%
I'm not sure what ETFs you are looking at, but the FTSE Global All Cap weights are int he video :)
i have nasdaq 100, s and p 500 and ftse250, that'll do
Excellent video! Watching from Montevideo, Uruguay
This is why my team consist of VOO and VXUS
Nice. 😊
VT and chill.
SCHG..FTEC and SPLG 😊
Ive gone VWRP for the children as i want them to be more diversified and I'm sticking with the S&P 500. The geopolitical situation outside of the US is so volatile, I can't a situation where the rest of the world outperforms the US, but who really knows. I may allocate some funds into emerging markets in the future.
Why not VWRA for automatic dividend reinvestment?
@@hughmolloy1403 I meant VWRP. I prefer accumulating funds to use reinvest the dividends. Edited my post
Honestly, ever since the collapse of the USSR we have been in a state of deglobalization. Would not be surprised if the United States brings back a TON of blue collar work with automation. Only reason why we helped so much of the international world was to stop the communist threat. Now the only communist threat is China who is capitalist but kept the name for namesake. I expect the s and p 500 to continue growth in the next 60 years at least. The geopolitical situation has changed to make the US primed to be on top because Europe and a lot of Asia is rapidly aging beyond replacement and takes in little immigrants.
I agree 100%
From my view, I can endure less return on U.S.(or U.K.) market since is the safest place to put my money, rather than investing all world ETF which partially invested in Russia and went to zero after the war of Ukraine.
@@pyli535 I see a lot more civil wars and coup’s in the future. The United States is the most stable. We have the most and diverse natural resources than most of the world. We have two neighbors who we are on great terms with. We are divided by two oceans from everyone else, we have the largest navy to secure it. We already are the center for innovation and most of the worlds wealth is in the United States.
@@pyli535 Went to zero, where did you get that information from
Globalization was not some government policy driven by the threat of the USSR. It was done by corporations seeking to minimize costs. But a corporation seeking to minimize costs could also just take the automation technology to a country with cheaper labor, weaker labor rules, and decent/stable institutions and build their factories there. I agree that since the pandemic there has been a push to shorten and simplify new supply chains, but a lot of that has been moving production lines out of a dozen countries and concentrating it in a few and moving some production from China to Mexico, and Vietnam.
People have been predicting the reascendence of US manufacturing for decades and the sad fact of the matter is that imports are just too cheap for that to really work without super high levels of protectionism (the strong US dollar being one factor).
Eggs and basket! Risk diversification. I'm weighted towards S&P500, and tech & AI, but invest in "All World" also.
I read that the Nasdaq outperforms the S&P500 by quite a large margin
US is a concentration, too volatile and it’s recency bias. Sometimes you have to bet on the losers too. If it all goes wrong and I’m on Dave Ramsey baby step 1 with the bowls of rice, I can at least tell myself I didn’t take too many risks by having something like sp500.
The S&P 500 ETF is the safest and easiest way to make guaranteed money
@@sanchezz4387 its not save, its riskier then a more diversified ETF, it having performed well in the last 13 years doesnt make it less risky
@@sanchezz4387how much you got in it ?
Well you crack on Toby and chase that other 43% I will stick with the S&P 500.
Best hope that know it all attitude doesn't come back to bite.
I didn’t realise how big Berkshire was
900bil market cap. 7th biggest in usa
A big chunk is cash .... It's own direct holdings and then a boatload of cash through Apple ownership.
@@ChrisShawUK and dozens of other companies
Global index fund….and wait…💪🏻
As someone who’s just got into this mind field of trading, I’m doing my research first and it’s been nothing short of mind blowing on how much there is to learn but I’m seeing trends already
I would have to ask how much better the international markets perform compared to the US market (or S&P 500) and is it really worth moving my money out of the S&P 500. Besides if one is invested in U.S. based multinational companies, they are invested internationally.
the US market is going well and likely will keep on going well but i do agree many of the largest caps feel like they have reached such a great extent they stuggle to produce further growth other by cranking up the price. Everyone already has some facebook platform, everyone has a microsoft pc, most people that want a overpriced handy already have them. Mc Donalds cranks up their price and then slowly realises the total revenue does not go up due to them pricing people out of its products.
SP500 in the end is a national and nowadays a sector bet and therfore automaticly has a higher risk associated with it. Some further diversification like starting with an all world etf or Msci world has less risk. Those with already a lot of SP500 on the other hand should think about adding in some emerging markets etfs by switching the new aquisition money into buying those. To me they feel fairy well priced.
Do you think our much easier access to index funds could cause prices to continue rising simply from more people buying?
Yes, and since index funds are weighted by value, we are artificially inflating the share price of the top companies
Do you ever re adjust the weights/% of how much cash is invested into the individual etfs in your self managed Invest engine portfolio?
+1
Great video Toby, thanks.
An MSCI USA Index ETF is a good alternative.
The top stocks in the S&P500 don't just make their money in the US anymore
Yeah I always say this when my friend asks why my S&P weighting is so high, the top companies in there are essentially global companies despite being labelled as US stocks
Interesting 🧐 Great job on video 😊
I don’t get what all the fuss is about. Most global funds are weighted heavily to the US anyway meaning you’re going to feel the same bumps in the road as the S&P then pay higher fees for less gain.
Its less volatile and you never know if US will perform the next decade. Its worth having world etf imo
How do I invest in the S&P 500 with trading 212 or other apps?
You could always go for *less performance* (total return) by investing in "broader" indices than the S&P 500. But why? Give me an example when the US economy was competely devastated and at the same time revenues as well as profits of large / mid / small companies in developed / emerging countries went through the roof. And non US companies could refinance at lower cost. 😅 Then spend a minute or two to reflect what made the ... top50 companies in the S&P 500 that successful resp. dominating, in their home turf as well as internationally. Assertiveness? Colleges (fostering start-ups)? Innovations? Venture capital? Business models? Focus on growth (and int'l biz)? Labor unions and strong labor laws or the oppostite? 😊
Well, biz models. The rest of the world, particularly the U.K. and Europe, still favors "traditional" biz models. The US is ahead, with data-driven bizmo's and first biz relevant AI implementations. 🎉
Please can you do a full playlist on investing for your kids?
Good future idea thank you
Hopefully not too far in the future 🤞
So I'm 50 years old (dammit!) - and 've got about 16 years left to invest - I'm starting with about 30k - and am planning to put £500 away per month - is it worth it?
Of course that's worth it
If you're still young, no, you don't. I've been hearing the emerging markets argument for decades. They continue to be trash. The S&P 500 companies are mostly multi national anyway.
There's a reason why everything gets compared to the S&P.
The S&P 500 also has the advantage of being super low cost compared to more global funds so that's attractive.
It does indeed yes! So that is always a factor too
I trust Warren over a RUclipsr 😂
Anyone here have an emerging markets etf allocation?
10%
Ya, all caps ~ 10%
Thanks for your informative video. Its really helpful for investment. Would you please guide me where to buy Invesco QQQ trust fund? it is not available under HL funds list. Please advise.
EQQQ is the uk equivalent
Just interested to know Toby has your views on your investment strategy changed over the past few years? Ie did you swap over from VUSA to global all cap?
I've certainly switched from a focus on companies to be much broader. As much as I love the S&P 500, I'd rather just own the whole world :)
The answer is always the same, Diversification! VWRP is safer than ever…
If I had not bought 20k worth of s and p 500 2 years ago
And instead just bought say 2500 pounds worth into each of the magnificent 7
I’d have made far more money
Indeed it is easy to beat the S&P 500 over a 2 year period, Over a decade or two not so much at all.
Maybe to just buy the nasdaq
@@1greener it’s not easy to beat the s and p
But what I mean is say pic a year
Say 2017 as example I wonder if the s and p 500 did better than if someone just bought shares in the top 10 companies in the s and p ???
Yeah and if my auntie had balls she’d be my uncle!
You can’t look back and think like this, nobody knows which specific stocks are going to do best, that’s why we index…
Not sure your analogy is entirely relevant.
Im 50% S&P 50% VWRP. That’ll do for me for a while. Set and forget. Simple investing. There might be better out there but I can’t be bothered faffing about.
That’s not 50, 50. It’s just more USA. 60% of global etf is USA.
I’ll clarify. I’ve got 50% of my monthly investment going into the S&P and 50% going into VWRP and it’s doing very well thank you. 💰
What does the company s and p global do ? How does it make money ?
Great question! So they sell their research and their indexes under a license fee. So basically anytime you create an etf and get investors into it they will take a small cut of that money for the license!
Didn't know about the 4th requirement (must be profitable in the last four quarters) ... what happens in a recession?
It’s the total sum of the last 4 quarters and I believe it’s only for the requirements to join.