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Paul Merriman: Why Vanguard Total Stock Market Isn’t The Best Fund In The Fleet

TedTed
in Fund Discussions
FYI: For investors who want everything wrapped into a single package, Vanguard’s Total Stock Market Index fund seems a reasonable way to access U.S. large-cap blend stocks.

And there's plenty to like about Vanguard Total Stock Market Index VTSMX, +0.04% : Low expenses, massive diversification, low turnover and of course — no sales load.

But this fund falls far short of its "total market" title. In fact, the fund gives investors only a small part of what it takes to diversify a portfolio into the best asset classes. This is no small matter, since that diversification accounts for more than 90% of an investor's likely return.
Regards,
Ted
http://www.marketwatch.com/story/why-vanguard-total-stock-market-isnt-the-best-fund-in-the-fleet-2014-12-03/print

Comments

  • Tampabay
    edited December 2014
    The guys obviously no Vanguard Fan....and that's no big deal
    But most of the stuff he spits out IS wrong and misleading....that is a BIG deal

    "How does the retirement expert spend his retirement? By helping others with theirs. More articles from author, educator and financial expert, Paul Merriman."
    Self proclaimed titles: retirement expert, educator of what?, financial expert, really? thats a lot of expertise with little evidence to show from article .....thanks for the HELP Paul...I pass
  • TedTed
    @Tampabay: "The guys obviously no Vanguard Fan...." For your information, Paul is a huge fan of Vanguard Funds.
    Regards,
    Ted
  • Tampabay
    ANY previous Vanguard comments/articles from this guy? Would like to see
  • TedTed
    @Tampabay: You wish is my command !
    Regards,
    Ted
    http://paulmerriman.com/vanguard/
  • Tampabay
    That's Paul's V. selections...not the best but probably passable for non Vanguard investors to mull over
    I would have a different selection (after 30+years of excellent gains with vanguard) My wife(who could caresless) picks her favorites and makes her 8% every year (Avg)
    So maybe he is an "expert"....but....
  • Tampabay
    Here's some decent Vanguard information by another Market watch writer: FWIW...tb


    “Quietly, Vanguard’s actively run funds have outperformed their more-famous index siblings,” said Morningstar researcher John Rekenthaler in a recent column, pointing to returns over the past 15 years. That’s a particularly striking result, since in general, most active funds aren’t able to beat their benchmarks consistently.

    What’s Vanguard’s secret to success? It includes making sure its active funds are low-cost, as well as outsourcing the stock-picking to fund managers who go through an extensive screening process.

    “We think we have a very good process for selecting managers,” Vanguard CEO Bill McNabb told MarketWatch. He also said: “If you’re going to take active risk, your best chance of preserving any outperformance is to have a low-cost portfolio.”
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