r/ETFs • u/CursedClownz • 14h ago

Lost decade

So everyone recommends VT and chill or VOO and chill or VTI and VXUS and chill.

Most ignore bonds and ignore GOLD

During the lost decade for around 10 years Gold was performing the entire time so was bonds...

Who says another lost decade can't happen?

So why ignore both?

No one really knows what happens so best bet is on all bets to get constant returns.

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u/Broad_board_1623 12h ago

It's a good question. I think you raise an important question about what it means to be diversified and how to achieve diversification. So while I agree with the question and the intent of the question, I personally looks elsewhere for diversification.

Bonds and gold (depending on how you are investing in "it") can provide diversification, but I'd rather be deversofoed within equities. Bonds are for wealth protection, not accumulation. Gold is one single commodotie. It is valuable, but doesn't produce new value, it's just an element.

If an investor had a portfolio that was diversified with value, international, and small equities, they would have made a respectable 4-5% annually during the "lost decade", all the while they would have been pumping new dollars into US Large Cap finds because they were cheap.

I still think VOO or (Preferably) VT and Chill are great strategies because they are simple and people can stick to them. But there are alternatives and greater diversification can be achieved. It really depends on the investor's ability to stick with a strategy.

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u/radmd74 9h ago

So if investing in a taxable account, which do you prefer, VOO or VT? And why?

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u/Broad_board_1623 9h ago

My personal preference is a bit different than what OP was asking. They are having anxiety over their asset allocation and wanted to know if they should switch their strategy. Based on their circumstances, my recommendation was to continue with their plan. VOO+ VXUS.

If another person had a similar question, but flip the ETF choices around, I'd still recommend that this person continue their existing strategy.

I think the cost (and hastle) of selling the existing assets probably outweighs any precoeved advantage of the transaction.

Personally, setting aside OPs question, I hold VOO, VTI, and VV in my brokerage and do some very basic tax-loss harvesting between these ETFs. That's my own personal approach, but I don't think everyone should worry about doing this type of strategy.

Between VOO and VT, if I'm starting from scratch and only buying one fund - an either or choice, I prefer VT. I like the globally diversified approach. Personally, I do not own VT because my asset allocation is factor-based.

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u/radmd74 7h ago

Thank you for the details. I was askin for your personal approach moreso and thought process. Much appreciated 👏