Source
r/DaveRamsey•
MedicalLabScientist

GUIDE: How to INVEST YOURSELF FOR FREE on Fidelity without using a Smart Vestor Pro

Dave wants you to go see a smart vestor pro and pay them a lot of money (5.75% FEE)

In this quick guide I will show you how to make an account on fidelity and invest in the 4 Dave funds for free.

  1. Aggressive growth fund: Fidelity Small Cap Index fund: Symbol: FSSNX (25%)
  2. Growth Fund: Fidelity S&P 500 Index fund: Symbol: FXAIX (25%)
  3. Growth & Income Fund: Fidelity Large Cap Value Index fund: FLCOX (25%)
  4. International fund: Fidelity International index fund: FSPSX (25%) or (12.5%)
  5. International option 2: Fidelity emerging market index fund: FPADX (0%) or (12.5%)

Guys, this is a wonderful way to get started investing because Fidelity has 1$ minimum with their index funds.

For example you can open an account right now with fidelity and transfer over $10

You can then deposit $2.50 into each of these 4 index funds ($10 total) and have a stock portfolio going on monday.

This is a way better way of doing it then paying a smart vestor pro a ton of money so just wanted to share how I do it.

Posted Jun 5, 2021, 2:35 PM UTC

148131
wolley_dratsum•

Or open an IRA with Vanguard and put 100% in VTSAX and never worry about it again.

21
iLoveSevBS7•

Have you tried comparing this portfolio with maybe like VTSAX for a period of 10 years with consistent investment every year? Try portfolio visualizer

12
gr7070•

VTSAX is going to crush it because US has grossly outperformed int'l this last decade. Additionally large cap has pounded small cap as well over that same period.

They're both, more or less, index portfolios. Though the OPs has a poorer diversification than VTSAX.

Returns are a terrible way to determine which decision is better. Results based analysis is a bad way to determine success - it ignores that the decision made can only be judged based upon the information available at time of decision.

4
iLoveSevBS7•

How do you suppose to take a decision then? Past performance is not a guarantee of future but it is surely a good indicator and only data available.

3
gr7070•

You make the decision based on what is considered the objectively best approach with what we know today.

Simply that's a 3-fund portfolio. If one is unwilling to learn or manage a 3-fund portfolio the other easy objectively reasonable approach is a Target Dated Fund.

Picking LeBron in the NBA draft is the correct choice. If LeBron happened to have a career ending injury his first practice that doesn't make the pick incorrect. Just unlucky.

6
iLoveSevBS7•

👍

Hope we are lucky then!

3
anusbarber•

You are right. it is tough to look at a fund that is performing well and chuck it....because its performing well. The truth is, is that it is luck. There is no study that shows a fund family, or even a specific manager is better than the market. You man have a few acceptions here or there. Peter lynch, will danoff, etc but likely once you figure out who it is, they are a few years away from retirement and all bets are off again.

The eye opener in the world of picking active funds is the SPIVA persistency scores. They look at winners and show what percentage of them continue to be winners after certain periods of time.

example, US equity funds that are in the top half of their category for a period of 3 years have a 52% chance of remaining in the top half for the next 3 years. 5 years? just 15% chance. you don't even want to know the 10 year.

and thats just to stay in the top half! to stay in the top quartile is 1.52%.

so when met with that information, and then looking at what funds to i pick in the 4 categories. I don't even care if you have an advisor! good luck.

thus is the argument made by the index investor. the indexes are almost always squarely in the 2nd quartile. day in and day out. every once in a while they hit the 1st. pretty good route considering you don't have to really think about anything from a picking standpoint (you still have behavioral issues but the argument is also that settling for indexes allows you to settle on total market volatility)

2
iLoveSevBS7•

tl;dr is just go index 😅

2
MedicalLabScientistOP•

Though the OPs has a poorer diversification than VTSAX.

lololololol

0†
MesacForestwolf•

I am totally uneducated in the topic. Instead of lolololol, could you please explain how or why its accurate or inaccurate to say it is a poorer diversification option?

Genuine thanks!

2
gr7070•

A total stock market fund owns every share in the US (or world for total int'l). By its very definition it is wholly diversified - one can't be more properly diversified than that.

People commonly think adding another mutual fund or few make it even more diversified, but that can't happen. All it does is have one owning more of X. That's called overweighting and actually makes something less diversified. Thus my comment about worse diversification.

This is a common misconception and attempt by many.

The OP LOLed because of a lesser known fact. For the history of the market small cap stocks have slightly outperformed the market as a whole. Additionally value stocks have outperformed growth stocks, as well.

So, technically if one wants to have an optimized portfolio they should slightly lessen or "worsen" their diversification to overweight small cap and value.

Most folks aware of all these things ignore the small-value outperformance, mostly for ease and simplicity, and just buy total US stock market, total int'l stock market, and total bond market; known as a three-fund.

The large percentage of investors don't want to learn much about investing, manage their portfolio, rebalance every so often and deal with the emotional swings of the market.

Those folks should take the next best option, nearly as good, and just buy an Index Target Dated Fund.

Sadly Dave continues to direct his audience to avoid this incredibly simple, efficient and effective way to invest. This is a massive disservice.

It appears this might be because Dave makes money from doing so. Anyone who knows advisor fees plus their poor actively managed funds - as Dave knows - it's hard to see any other reason for this. Which is a sad indictment.

1
c8080•

I love Fidelity. Great customer service and just easy to use.

9
ASlagsBS2•

Not to mention the fees in these funds is essentially $0. I have access to these accounts in my company’s retirement account and they are unbelievably cheap at 0.015%! That’s $1500 for every million you have invested. Far less than what Dave is offering.

8
awatson2014•

This is literally what I’ve been looking for the last few months! Thanks so much for sharing.

7
anzenkethBS456•

Sorry to say but OP is wrong. He does not understand his
definitions. Dave's investing recommendations are closer to the following:
FXAIX -- Growth and Income (Has Growth companies and
companies they pay a dividend(income))
FMDGX -- Mid Cap Growth. (Growth companies)
FECGX -- Small Cap Growth. (Small companies typically grow Aggressively)
FZILX -- International market fund. I choose FZILX over FSPSX because it has a
0% expense ratio.
Growth has a very specific definition in the investing
world.
https://www.fidelity.com/learning-center/investment-products/mutual-funds/2-schools-growth-vs-value
It is better to be in the market then anything.
The above is outside of the point that I do not like Dave's
investing advise in investing. It is purposely obtuse. I more follow Jack
Boogle's the founder of Vanguard's advice. It was designed for hands off set it
and forget it style of investing.
FZROX 60% FZILX 40% will get you the total world market with
no expense ratio.
If you are confused go find an investment advisor that is
tied to having a fiduciary duty. This basically means he advises you for a fee
as opposed to how much the advisor makes on commission

5
MedicalLabScientistOP•

Glad I could help

3
Indicazucchini•

I just do FZROX (70%) and FZILX (30%). 0% ER is great. When I get closer to retirement age I’ll allocate more to bonds

7
sexycorey•

that’s what i have

2
gr7070•

This is one of the few wise comments in this thread! This is a great approach, one I recommend to some.

However, most should simply use an INDEX Target Dated Fund 20XX.

0
Station-GoldBS4-6•

I rolled my 401k and 457 to an IRA last November. One of Dave's professional investors did it for me. The charge is 1.5% per year and everyone here told me I got ripped off. I was happy with my old employer fund offerings (and pension is through them) and thought maybe I would get a little bit better rate of return if I moved it. Nope. About the same only now I lose 1.5%.

I figured I will give it the year, and I guess I will, but I have one investment with Vanguard that I use for my car sinking fund. I hear good things about Fidelity too. How hard is it to do another direct rollover on my own? Do either of those companies help you at all? I am a bit afraid I will blow it and end up with taxes and penalities on those funds since I am not 59.5.

7
gr7070•

Couple things.

What does giving it a year do for you? Other than more fees?

Your trusted financial advisor had you move a 457 with no early withdrawal penalty over to an IRA that now has penalties. This should be evidence they are not making decisions to benefit you.

You don't have to to a direct rollover yourself. Vanguard, Fidelity and Schwab will hold your hand doing this. They will answer every question you have. They will do just about everything for you except what they legally can't do. Ask for their help. Again ask again as much you need to.

Just work with them to ensure a direct rollover.

You can use their INDEX Target Retirement Income funds since you're in retirement.

5
Station-GoldBS4-6•

Not really. I am still working a full time position. I don't plan to retire for another 5 years or so at the very earliest. I only have this pension because they hired a psychopath who systematically fired or pushed out all the employees, then tanked the program. I only took my pension when I realized I had to leave and I wasn't going to return to that pension system. I am not retirement age.

That's a good point about the 457 though.

I haven't paid any fees yet so another good point. I should try and pull it before those are assessed.

2
gr7070•

I am still working a full time position. I don't plan to retire for another 5 years or so at the very earliest

The point is to choose the appropriate dated fund. So do that.

I haven't paid any fees yet so another good point. I should try and pull it before those are assessed.

That almost certainly couldn't be less true. You are paying an expense ratio for each mutual fund daily. The same almost certainly applies to the 1.5% AUM fee.

That's a good point about the 457 though.

Not only that, but the only reason the advisor had you move the 457 was so they could manage those funds and thus collect the 1.5% fee on them. With those funds in the much better 457 they cannot charge you for them.

Your advisor is a crook.

3
Station-GoldBS4-6•

No, I am not a fan of the dated funds. They get too conservative as time goes by. I would rather invest in a diverse mix of small, mid, and large cap funds with good track records.

I am not going to go as far as call him a crook but I don't think I am going to be any better off this year than I was on my own.

2
guccimeemaw•

Can someone advise how I rollover a 401K from an old job into an IRA with fidelity?

7
MedicalLabScientistOP•

Yeah, best advice is to just call Fidelity and tell them and they will do all the work for you.

All you need is your account number of your old 401k

8
gr7070•

Make certain you are doing a "direct rollover". Call Fidelity and they will bend over backwards to help you do this.

If by chance they send you a check make certain you call Fidelity and follow their instructions to get that check to Fidelity.

You only have so much time to have that check turned over to Fidelity before it's considered a withdrawal and taxed. Though this is a low likelihood occurrence, and you will have enough time to make the transaction.

It's pretty simple and not much to worry about. Though your hesitation is understandable though.

6
guccimeemaw•

Thank you so much kind souls! I need all the help I can get. If there is a simple answer, why does Dave encourage the Roth IRA vs the regular IRA and is it always better?

5
gr7070•

Dave does it for simplicity.

Most should be investing in their 401k and/or Roth IRA.

There's some nuance and complexity involved in the choices. But the differences between a 401k and a Roth IRA aren't that significant. They're both great option.

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Msgazelle2021•

As a Roth grows over time u don’t pay taxes on that when u withdraw the money which is what happens with a traditional or ( regular) IRA. Also, Sign up w ur companies 401k/403B and put in at least…. as much as your company will Match or a Goal of 15 % of your income. You’ll be shocked at how much it will grow over time!! I just opened a Roth for my 21 yr old! He’ll thank me later!

1
jdford85•

I agree with this. I have some index funds but also regular mutual funds that I think fall under daves guidelines. Without high fees and without front end loaded funds. Im not saying an advisors is all bad but the investing portion can be handled if your a responsible person willing to put a modest amount of effort in.

5
Mog_MelmBS4-6•

Im not saying an advisors is all bad

I think it's more like there's little evidence that in the long term anyone can reliably beat the stock market as a whole. You can make some smart plays on individual stocks or whatever, but OVERALL... you can just throw everything on an index fund and forget about it. You don't need to pay someone to do that for you.

2
jdford85•

My point in an advisor not being all bad was more to the idea of protecting your wealth. They can help you be sure you have the proper life insurance, wills and so on. More of a well balanced approach. Sometimes we get caught on accumulate and forget how easy it is to lose.

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1
Skyyacht•

Just use Fidelity’s lifecycle funds…. Don’t complicate it.

This automates it, and assures the investor that the risk profile will adjust as you age. It solves the problem of having people touch their investments which makes them more likely to move it out of the market when they “rebalance”.

Don’t use SmartVestor, don’t use other fiduciaries. Just use a freaking lifecycle fund appropriate to your age so you don’t lose your shirt.

5
PradaOnPanda•

I disagree. All lifecycle/target age funds I have ever looked at are 1) not risky enough to start and 2) get too conservative, too early. Dave’s recommendations are just short from perfect for the average individual.

8
gr7070•

This is one of the very few wise comments in this thread.

Most people, especially Ramsey followers, should be investing in INDEX Target Dated Fund 20XX.

Sadly, Dave has done his followers a massive disservice by not recommending the easiest efficient and effective way to invest.

0
Apprehensive-Rip-529•

I have TSP and just use the Target 2050 find. Risk is high enough and the funds are so simple. Any gov employee should just set it and forget it.

2
702Pilgrim•

Where can one start to edumacate oneself?

5
SWWayin•

Get JL Collins “A Simple Path to Wealth.” I recommend the audiobook, easy listen and does a good job of keeping it simple.

6
goldtoothdave•

Let me help sum that ENTIRE book up.

Buy VTSAX.

Loved the book though...not hating. Just if he said it once he said it 1000 times (at a 11.9% average return over the past several decades)

4
jonahewell•

Yes🙌

1
Apprehensive-Rip-529•

Another simple read... Automatic millionaires. It was life changing for my wife and me in our 20s. Like your utilities, make investments a weekly/bimonthly/monthly bill. Then use what others said in the simplest mutual funds. Don't make this hard.

3
MedicalLabScientistOP•
  1. "Talking Real Money" Podcast
  2. "Sound Investing" with Paul Merriman Podcast
6
gr7070•

An incredibly easy yet thorough, 100-page book is a great start:

Investing Made Simple, Mike Piper

1
iLoveSevBS7•

Is this similar to: https://jlcollinsnh.com/stock-series/

2
gr7070•

It is similar. They're both founded in the same principles.

Only quibble with JL Collins is his lack of int'l.

3
iLoveSevBS7•

Have you compared both in past 10 years investing maybe a 1k every month with same initial amount on site like https://www.portfoliovisualizer.com/backtest-portfolio

1
enclave76•

I love my fidelity accounts. Great app and website with awesome customer service

3
darkblash69•

Don't follow Dave for investment advice. He's great for undisciplined spenders and getting out of debt.

3
702Pilgrim•

Intriguing. Can you please explain more.

-1
darkblash69•

He's been shaming cryptocurrencies since 2017 here's a link to a rant.

During the huge March 2020 stock market dip, he told a caller to not lump sum invest $50k, but to dollar cost average it. I remember the call and screamed at my radio... it was very obvious at the time it was a flash crash and you can once in a while time the market

0
ThereforeIVBS4-6•

He's been shaming cryptocurrencies since 2017

That's you reason?

Crypto isn't investing, it's like speculation.

During the huge March 2020 stock market dip, he told a caller to not lump sum invest $50k, but to dollar cost average it.

Which in the beginning of March seemed like good advice.

If you look at the crash in 2008, DCA was the best course. Same with 1999, 1989,...etc...

1
Apprehensive-Rip-529•

Dave also shames single stocks and never touched upon ETFs. Anyone who claims they are too risky but then pushes you to go to a "pro" for 1.5-5.75% in fees is a joke.

You can literally open a Fidelity account (or T-Rowe Price, Schwab to name a few) with no minimums other than 100 into an index fund with monthly or bimonthly buys at 0.10% in fees or less. You can also use Fidelity and Schwab to buy ETFs commission free for at times lower fees. This is the same for single stocks.

Single stocks can be riskier, but his attitude towards them is just mind boggling. But I also know he is advising people with zero investment background and no interest in really learning, this people perfect for an advisor. I have a dividend focused portfolio that will give me straight cash flow in 10 years when I retire completely at just over 50. A few growth stocks, like sbux and appl, have become dividend providers and will only continue.

2
nagerjaegerBS7•

Love this post OP. Huge win for those who don't know they can get started. As to all the "better" advice. The big point is, GET STARTED. One can always adjust to the optimal investment as one gains knowledge.

3
gr7070•

Very much agree on the get started!

It's a big part of what makes index Target Dated Funds so great. One can get a professionally managed, diverse, risk appropriate fund with essentially no work or special knowledge.

The incredibly minor critiques of them do a huge disservice to the lesser knowledgeable investor.

The extreme majority of investors should be using TDFs.

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1
gr7070•

I appreciate the OPs efforts, but their execution is largely awful.

For starters, most Ramsey followers should use an INDEX Target Dated 20XX Fund (TDF). It is the easiest efficient and effective way to invest.

Freedom INDEX Fund 20XX are a Fidelity's name.

It is especially great for one who doesn't want to manage or learn much about their finances. Do yourself a favor use TDFs!

While most of Dave's investment advice is also awful, he is correct about not investing in individual stocks and his 75:25 US: Int'l allocation is very sensible.

One can easily simulate Dave's allocation while also doing what most learned investors do, and that's use a three-fund portfolio.

The 75:25 is simply 75% a total (US) stock market fund (FZROX) and 25% a total int'l stock market fund (FZILX). That's it. You're done and invested as well as anyone can possibly invest.

When appropriate for you add the 3rd fund of the three-fund portfolio, a total bond fund.

Or again, just use a TDF.

1†
jdford85•

Target date funds under perform because of the amount of bonds usually held. Especially for younger people it will eat at your returns when you have 20 plus years. I dont trust the auto balance of bonds either. I was in target date fund before discovering dave and performance was not good.

8
Pittsburgh__Rare•

Second. After listening to Dave I looked at the Vanguard 2050 fund and realized it underperformed the S&P by 3% this year. Because it’s 10% bonds.

Bonds made sense for my grandparents, they performed well and were reliable. They made sense to my dad because he was one generation removed from the Great Depression. And bonds were still performing well when he got out of college.

Bonds now don’t even keep up with inflation.

Target date funds are the super simple basic way to invest. The next step up is selecting mutual funds based on an actual plan (vs at random).

5
ThereforeIVBS4-6•

Bonds make sense when the interest rates are high.

Bonds are terrible when the interests rates are near nothing.

3
gr7070•

Vanguard 2050 fund and realized it underperformed the S&P by 3% this year. Because it’s 10% bonds.

The reason for returning less is actually as much about the lower performance of international as it as bonds. Since int'l is about 40% of equities in that fund.

Some timeframes US stocks are great sometimes not. Ditto int'l. And to a lesser degree bonds.

From 1999 to 2009 US stocks returned -2%.

Owning all markets one will experience poor returns in some of them over time. Recency bias has US stocks performing incredibly the last decade.

This has nothing to do with things being different for your parents and grand parents. This is simply the random fluctuations of financial markets.

Owning 10% bonds has very little negative effect on return while also reducing risk.

1
gr7070•

They're index funds by definition it is impossible to underperform. Clearly you don't understand what you are saying.

Additionally the comment regarding not trusting the auto balance make no sense.

Yes bonds return less than equities. They also have far lower risk, and are absolutely a necessity for proper portfolio management especially as one nears and is retired.

Target dated funds commonly have about 10% bonds for decades before adding more. There isn't a huge difference in performance of a 90:10 portfolio and a 100:0 portfolio.

These are simple facts. It can be verified with simple Google searches.

0
jdford85•

So a target date fund with 10 percent bonds will not perform as the index does because of the bonds within it. If it returns 7-9% is that exceptable performance? If the sp500 did 10-12 percent that is a major difference with compounding interest over 10 years let alone 30 years. Then take into account the available multiple mutual funds that return 14-15 percent and the difference is exponential.

1
gr7070•

You continue to show your ignorance.

There's three indices here, US, int'l and bond. Each underlying fund will match their index exactly.

So yes they will absolutely match the indices returns.

As for the difference in return there is some, but there is also a large reduction in risk.

There is tons of info out there on the little difference between 90:10 and 100:0. It's far less important than buying and holding a high quality portfolio that the TDFs provide, at all times, without fail and without investor tinkering.

https://www.whitecoatinvestor.com/100-stock-portfolio/

An 80:20, not even a 90:10 only had a difference is 0.5%. Over 30 years that's only 12% total funds!

And we have absolutely no idea what the markets will do. Japan had 30 straight years of negative stock return! Three DECADES!

10% bonds has so little effect. I'm absolutely ok with 100% equities for the young, but avoiding TDFs because of 10% bonds is foolish.

Most all investors would benefit from using TDFs.

Lastly, if one doesn't want the TDF fine. Use the three-fund portfolio that the rest of my post focused on.

1
ThereforeIVBS4-6•

appreciate the OPs efforts, but their execution is largely awful.

For starters, most Ramsey

And a better recommendation would be?

For starters, most Ramsey followers should use an INDEX Target Dated 20XX Fund (TDF). It is the easiest efficient and effective way to invest.

For starters, advice isn't what "should do", it's translating Dave's vague outdated terminology investing advice into actual mutual fund recommendations.

Target date funds universally under perform and over charge for what's in them. That's why the brokerages push them, they are a great profit maker.

Do yourself a favor use TDFs!

Why. Index funds perform better with lower fees.

And TDF is not following the investing recommendations.

While most of Dave's investment advice is also awful, he is correct about not investing in individual stocks and his 75:25 US: Int'l allocation is very sensible.

It's not that Dave's investing advice is "awful". It's that his recommendation to pay for an investing advisor is outdated in the internet age. Also him glossing over his conflict of interest that he gets paid to make that recommendation.

When appropriate for you add the 3rd fund of the three-fund portfolio, a total bond fund.

Bonds are currently in a bubble with terrible yields.

Bonds do good when interests rates are higher because they keep you ahead of inflation during a downturn.

Or again, just use a TDF.

Or save the money and just do a broad index fund.

But that's not the point.

The OP's very clearly given point is "here are low fee funds that follow Ramsey investing philosophy without paying 2% - 5% to an advisor".

3
gr7070•

Target date funds universally under perform and over charge for what's in them.

More ignorance on display. INDEX TDFs cannot under perform. They are indexes and perform exactly as the market indices do.

That's why the brokerages push them, they are a great profit maker.

They "push" then because most folks are horrific investors on their own. This has been proven with an insane amount of studies and near infinite data.

People are prone to doing really dumb things like not investing at all, investing with too much risk, too little risk, not diversified, and incredibly common panic selling low and buying back in high.

Why. Index funds perform better with lower fees.

Again, showing your ignorance. The TDFs we're talking about are INDEX TDFs.

Or save the money and just do a broad index fund.

Which again these are.

The OP's very clearly given point is "here are low fee funds that follow Ramsey investing philosophy without paying 2% - 5% to an advisor".

Which they very poorly executed. As I also said just go 75% total US and 25% total intl and one basically has Dave's 25:25:25:25 rec, but more diversified with less fees.

0
ThereforeIVBS4-6•

More ignorance on display. INDEX TDFs cannot under perform. They are indexes and perform exactly as the market indices do.

That's an index fund, not an TDF.

Most TDFs are mostly summer index fund with some fiddling so they can justify charging 3-5 times the fees off the index fund they are taking to match.

See that little bit of fiddling usually under performs the base index.

They "push" then because most folks are horrific investors on their own. This has been proven with an insane amount of studies and near infinite data.

Then they world push the low fee Index funds.

TDFs exist because they can charge higher fees.

People are prone to doing really dumb things like not investing at all, investing with too much risk, too little risk, not diversified, and incredibly common panic selling low and buying back in high.

None of that is an argument for a TDF.

That's a decent argument for a Total market index fund.

Again, showing your ignorance. The TDFs we're talking about are INDEX TDFs.

Again, a TDF being mostly a base index fund doesn't make it an index fund. If it did, it works be an index fund and not a TDF.

You seen to be confusing two very different investing products.

Which again these are.

If the Fidelity freedom TDF were index funds, they world be called Fidelity index funds instead of TDF.

The TDF being 90% FXAIX with higher fees is actually pricing my point. Just invest in FXAIX or FZROX.

Which they very poorly executed.

Did you have better fund examples following the Ramsey investing philosophy?

As I also said just go 75% total US and 25% total intl and one basically has Dave's 25:25:25:25 rec, but more diversified with less fees.

That is a good investment strategy, though..

Not exactly what Dave is recommending.

The total market index fund are not "25:25:25".

Aggressive Growth small cap stocks do not make up a third of any total market index fund.

The total market is weighted to the large cap stocks because they are so much larger.

Even the S&P 500 has become heavy big tech growth stocks.

The Russell 3000 contains a lot more of the latter Russell 1000 than the smaller Russell 2000.

Ramsey's investing philosophy is heavier on aggressive Growth small cap stocks than what you are suggesting.

3
tanw42•

How does this compare to 60% FZROX and 40% FZILX as the these are zero fees?

1
gr7070•

It's not the exact same thing, more or less close enough.

Except that you 60:40 has 40% int'l instead of the 25% int'l that 75:25 FZROX:FZILX would have.

Dave's 25:25:25:25 is more or less a 75:25 portfolio but Dave wants people in managed fund guide by advisors instead of passive index funds.

1
anusbarber•

while what you are invested in and the fees you pay for them do add up, the true difference is behavioral. building a catchall portfolio that plods along and takings the gains of multiple asset classes, styleboxes, etc that you won't touch when things aren't exactly going great, or when they are going too great is the best approach.

While Dave sites statistics and talks about behavior when it comes to debt, he chucks all that out the window when it comes to investing (by telling you to buy active funds). He tries to fend off that growing amount of information by telling you to use an advisor. Which I think is a good idea for many beginners, especially if you are going to buy actively managed funds.

I think the above could be fine for investors. lot of overlap in LCV and SP500 thats for sure. I also think a portion of VTI/VXUS is also a fantastic option as well. in the end diversification differences are splitting hairs.

I think at some point and time Dave will have to begin to change his tune on investing. he uses out of date nomenclature often, ignores the vast amount of information at the hands of investors, prefers front load funds (i prefer front load to %AUM but front load products are disappearing. like in 2005 30% of equity mutual funds were front loaded, today 10% are) and his american funds products have begun slipping against their indexes by more than a percent over the past 10 years.

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[deleted]•

[removed]

1