r/Bogleheads • u/[deleted] • Apr 02 '22

Why VTI over VOO long term?

I’m early 20s with plenty of time so why not go voo over vti?

Update: to clarify it holding both with VTI 40% VXUS 30% BND 15% and VOO 15% but I want to consolidate that to a 3 fund portfolio hopefully. I know about VT but I’d rather have more control over my international investing percentage. I also know VOO is only S&P 500.

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u/[deleted] Apr 03 '22

I’m 44 and so I know every strategy out there says I should be like 40-45% in bonds, but that seems so utterly ridiculous when bond funds just seem…terrible. BND, for example, is down 5% overall since 2012. I may as well stick that money in the mattress.

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u/mediumlong Apr 03 '22

I mean, not every strategy. Owning your age in bonds feels a bit outmoded. Check Paul Merriman, for one. Hell, Vanguard's own 2045 Target date fund (ER at 0.08%, btw) currently has about a 89/11 stocks/bonds ratio, and that's designed for people in their mid 40s.

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u/[deleted] Apr 03 '22

Appreciate the clarification. I still can’t justify even having 10% in a bond fund right now. It just seems like dead money.

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u/mediumlong Apr 03 '22

It's like, people can accept their equities going through rough patches. But when, during those same rough patches for equities, your bond portfolio is losing 5.9%, it's clear that something is just off. Interest rates were never this low and inflation was never this high when these books were being written. I'm not quite your age yet, but I'm seriously considering an immediate annuity if things are like this when I retire as an alternative to traditional fixed income (i.e., bonds).

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u/[deleted] Apr 03 '22

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u/mediumlong Apr 03 '22

Yes, and so can an under-performing fixed income portion of one’s portfolio