Key insights
- The author concludes that optimizing beyond broad market index funds like VOO is difficult, as most alternatives offer lower expected value or excessive risk. International diversification and crypto are deemed unlikely to outperform. Leveraged ETFs are considered too risky. This perspective suggests a potential ceiling on returns for passive investors, with limited opportunities for significant outperformance, potentially dampening enthusiasm for active strategies.
During this bull market I got excited hitting new goals (first 100k in assets), I linked all my accounts together to see my networth across hsa, 401k, ira, brokerage, linked credit/loans.
Everything I have is pretty much in VOO equivalents. Which is cool, but I was trying to optimize further. Almost every other option after countless hours of reading has made me come to the conclusion that there's not any other asset that can provide better expected value with similar risks.
All other assets are projected to underperform, and have historically underperformed voo in recent history, international markets add diversification with lower expected results in recent years, and none of the available cryptos will likely be adopted in a way that'd make them out-grow the market longterm.
I'd invest in stuff that I think has a strong future, but those strong futures are just priced into the stock already.
I mean seriously the only other option that seems to have high likelyhood of better expected value seems to be leveraged VOO/QQQ equivalents, and that has the opportunity to basically wipe out the fund so the risk/reward really isn't there even for a small % of my portfolio.
Do you guys just invest into specific tickers as a hobby, or do you actually expect to out perform VOO with your play money?