Tuesday, March 25, 2025

VGT VOO and Other ETFs

Here is a wonderful LinkedIn comment to my post recommending the Vanguard S&P 500 ETF VOO:

"Buy and hold the S&P 500 ETF" what foolish advice. Buy and hold VGT instead. VGT massively outperforms SPY and QQQ. Which sector can outpace the tech sector? Put your goddamn hand down that was a trick question."  https://bit.ly/4j52F7C

As they say on the internet: Let's see it:


Normalized performance where VOO 9/10/2010 start date = 1000
Data source: Barchart.com



Above is the VOO VGT normalized chart and YES, VGT, long term, is a great fund with fantastic returns. There's no argument about that but AT WHAT COST? Looking year-to-date, the loss in VTG is more than THREE times the loss of VOO and the 52 week gain is LESS than VOO! Two, three, five year and more gains are HIGHER but so is the RISK!

If you are a sophisticated investor maybe the 23% implied volatility/risk is ok for you but most of us can barely stomach the S&P's market risk with our nest egg. My S&P recommendation was for individual investors, with limited time, capital and no special access to information. So yes, market risk is about as far as I am willing to go.

Also, going for return makes no sense for investors who cannot delay access to funds when markets go bad. If you want return, why NOT buy SOXL with the second highest 10 year return, or go hog wild buying the TQQQ 3X ETF? And why stop there when you can buy the highest returning ETF in history-the bitcoin GBTC? NO, the one day, short-term and long-term risks are too great. 


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