Key insights
- An investor calculates a significant opportunity cost from choosing VTI (total market index) over VOO (S&P 500) in the past six years, attributing the underperformance to mid- and small-cap drag. While acknowledging that past performance doesn't guarantee future results, the post highlights the potential impact of index selection on portfolio returns, particularly during periods of mega-cap tech dominance. This may cause some investors to re-evaluate their index fund allocations.
This is rough estimate taking into the account that investing was done over those 6 years (thank you AI).
It is a tough pill to swallow, but I just ran the numbers and sticking with VTI instead of VOO cost me so much in lost gains over the last six years. It really goes to show how much of a drag those extended mid-cap and small-cap periods can be on a portfolio compared to the S&P 500. Has anyone else looked back at their own allocation and realized they missed out on major mega-cap tech growth by betting on the total market?
The point isn't that we KNOW that VOO will continue to outperform. The point is that it DOES make a difference, despite what everyone says.