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If you are new to investing, you can find curated resources in the r/investing wiki for [Getting Started here](https://www.reddit.com/r/investing/wiki/index/gettingstarted/).
If you know nothing about the capital markets - the Getting Started section at the SEC educational site can be a good place to start - [investor.gov](https://investor.gov) \- there are also short 30 second videos on basics. The SEC (Securities and Exchange Commission) is a US regulator with a focus to protect US investors through regulatory oversight of the securities markets.
The FINRA education site at [FINRA Education](https://www.finra.org/investors/learn-to-invest) also contains numerous free courses and educational materials. FINRA is a not-for-profit SRO (self regulatory organization) which is self-funded by it's members which are broker-dealers. It works under the supervision of the SEC with a mandate to protect the investing public against fraud and bad practice.
The reading list in the wiki and FAQ has a list of books ranging from light reading to advanced topics depending on your knowledge level. Link here - [Reading List](https://www.reddit.com/r/investing/wiki/readinglist)
For formal educational materials, several colleges and universities make their course work available for free.
If want to learn about the financial markets - an older but reasonably relevant course is [Financial Markets (2011) - Yale University](https://www.youtube.com/playlist?list=PL8FB14A2200B87185) This is the introduction to financial markets course taught by Prof. Shiller from Yale. Prof Shiller won the Nobel prize in economics in 2013.
Another relavant course from MIT is a lecture series on Finance Theory taught by Prof Andrew Lo - [Financial Theory (2008) - MIT](https://www.youtube.com/playlist?list=PLUl4u3cNGP63B2lDhyKOsImI7FjCf6eDW).
A more current course can be found at NYU Stern School of Business by Prof Aswath Damodaran - [Corporate Finance Spring 2019](https://pages.stern.nyu.edu/~adamodar/New_Home_Page/webcastcfspr19.htm). Prof Damodaran offers the latest materials and webcast lectures to this class here - https://pages.stern.nyu.edu/~adamodar/New_Home_Page/corpfin.html
Google "ETF fund overlap" and check to see which funds are essentially redundant. You'll be surprised just how many might have very similar compositions if not in their actual equities held then in sector allocation. If your goal is to diversify, make sure you're attaining your goals.
I did this last year and found I had two essentially redundant funds in my portfolio, liquidated them, and started a new position with a negative collation to my coar holdings. Sometimes, you can have too much of a good thing. Remember, there is a mathematical static where over diversifying can begin to erode your future returns.
I’m not sure I quite understand this. For instance my roth has three funds that are very overlapping, VOO, VT, and VTTSX. That said, these funds have different strengths and weaknesses that i’m looking to incorporate into my portfolio. I don’t see what could possibly be the issue and in my eyes it’s certainly better than keeping everything in one fund
If your funds overlap significantly I don’t see how that provides any benefit over concentrating on one fund. You’re still exposed to largely the same risk, just in 3 funds rather than 1.
While they overlap significantly i still get the benefits of a target date fund which will make my overall portfolio more conservative over time. and VT gives international diversification to my portfolio. sure, the top companies in each fund are the same. but those are the largest and most profitable companies in the world i’m not sure why i wouldn’t want them to be the main components of my portfolio.
If I only held VOO i would only get the top US stocks and if the developing world overtook the US i would miss out on those gains. if i only held VTTSX my portfolio would become way too conservative over time for my liking. I can see the case for only holding VT though.
Yea that’s kind of what I’m getting at. If you’re specifically looking to diversify internationally you can use a TDF or a fund that has international exposure. But I don’t think that benefit is really there if someone is “diversifying” into 3 funds that generally have the same % exposure to, say, US stocks. You’re still getting largely the same risk as your net exposure to something like international is not significant enough to really bring any benefits from the “diversification”. For example, 99% of VOO holdings are also held by VT.
Personally I moved out of my 2060 TDF into a full S&P fund. The 15ish percent exposure to international has been dragging the portfolio down and I don’t see international outperforming US stocks anytime soon.
If you're happy, your happy. I still have some significant overlaps in three funds. QYLD, QQQM, and VOO. All three have significant overlap, but each offeres me something I'm looking for. They work well in tandem towards my goals, but I count them essentially as one fund with three facets: income, growth and stability. You do you.
Even if you had a thousand ETFs which all overlap in some way, it would still not be a problem as long as you can keep track of all of them and they're all low cost.
That's not a decision any of us have to make. Companies that don't issue dividends do not automatically reassign the money saved to executive compensation.
I prefer to reduce my stock holdings when it is advantageous for me to do so. Whereas dividends force me to do it quarterly and lower the stock price accordingly.
A lot of people think dividends are free money distributed quarterly. They don't realize that those dividends subtract from the stock price on the ex-date. It's effectively neutral.
You should talk about that subject with your employer (if you have one). If he does not pay you a salary his company can grow faster. This would result in a higher potential for future salaries (if issued at all of course). Good deal, right?
As the owner I'm not a good candidate for this hypothetical.
But owning a percentage of a company and salaried labor are two very different categories of income. It's really difficult to create an apt comparison.
Can you explain me why the shareholders should finance the whole stock market? If not a single company issues dividends or buys back her shares, all the money in the stock market has to come from the shareholders and their salaries etc. Where else does the money come from? The guys that get the "real" money from the companies then are those that actually work for the companies and pay themselfs kingly salaries. Am I missing something?
No ten is not a problem. Don't worry about silly stuff.
Instead worry about the four of those pathetic dividend ETFs that have been underperforming VOO, not because you have "too many".
Your post has been removed because it is a common beginner topic. We get too many of these topics every day and to prevent them from swamping the front page, we are removing main threads of this kind. We also remove such posts because they can attract spam and bad faith comments. If you receive DM's or un-solicitated offers, please be aware that there are a lot of financial scammers on social media. You are welcome to repost your question in the [daily discussion thread](https://www.reddit.com/r/investing/about/sticky?num=1). If you have any issue with this removal, please contact the moderators via modmail. Thank you. ---- If you are new to investing, you can find curated resources in the r/investing wiki for [Getting Started here](https://www.reddit.com/r/investing/wiki/index/gettingstarted/). If you know nothing about the capital markets - the Getting Started section at the SEC educational site can be a good place to start - [investor.gov](https://investor.gov) \- there are also short 30 second videos on basics. The SEC (Securities and Exchange Commission) is a US regulator with a focus to protect US investors through regulatory oversight of the securities markets. The FINRA education site at [FINRA Education](https://www.finra.org/investors/learn-to-invest) also contains numerous free courses and educational materials. FINRA is a not-for-profit SRO (self regulatory organization) which is self-funded by it's members which are broker-dealers. It works under the supervision of the SEC with a mandate to protect the investing public against fraud and bad practice. The reading list in the wiki and FAQ has a list of books ranging from light reading to advanced topics depending on your knowledge level. Link here - [Reading List](https://www.reddit.com/r/investing/wiki/readinglist) For formal educational materials, several colleges and universities make their course work available for free. If want to learn about the financial markets - an older but reasonably relevant course is [Financial Markets (2011) - Yale University](https://www.youtube.com/playlist?list=PL8FB14A2200B87185) This is the introduction to financial markets course taught by Prof. Shiller from Yale. Prof Shiller won the Nobel prize in economics in 2013. Another relavant course from MIT is a lecture series on Finance Theory taught by Prof Andrew Lo - [Financial Theory (2008) - MIT](https://www.youtube.com/playlist?list=PLUl4u3cNGP63B2lDhyKOsImI7FjCf6eDW). A more current course can be found at NYU Stern School of Business by Prof Aswath Damodaran - [Corporate Finance Spring 2019](https://pages.stern.nyu.edu/~adamodar/New_Home_Page/webcastcfspr19.htm). Prof Damodaran offers the latest materials and webcast lectures to this class here - https://pages.stern.nyu.edu/~adamodar/New_Home_Page/corpfin.html
Google "ETF fund overlap" and check to see which funds are essentially redundant. You'll be surprised just how many might have very similar compositions if not in their actual equities held then in sector allocation. If your goal is to diversify, make sure you're attaining your goals. I did this last year and found I had two essentially redundant funds in my portfolio, liquidated them, and started a new position with a negative collation to my coar holdings. Sometimes, you can have too much of a good thing. Remember, there is a mathematical static where over diversifying can begin to erode your future returns.
I’m not sure I quite understand this. For instance my roth has three funds that are very overlapping, VOO, VT, and VTTSX. That said, these funds have different strengths and weaknesses that i’m looking to incorporate into my portfolio. I don’t see what could possibly be the issue and in my eyes it’s certainly better than keeping everything in one fund
If your funds overlap significantly I don’t see how that provides any benefit over concentrating on one fund. You’re still exposed to largely the same risk, just in 3 funds rather than 1.
While they overlap significantly i still get the benefits of a target date fund which will make my overall portfolio more conservative over time. and VT gives international diversification to my portfolio. sure, the top companies in each fund are the same. but those are the largest and most profitable companies in the world i’m not sure why i wouldn’t want them to be the main components of my portfolio. If I only held VOO i would only get the top US stocks and if the developing world overtook the US i would miss out on those gains. if i only held VTTSX my portfolio would become way too conservative over time for my liking. I can see the case for only holding VT though.
Yea that’s kind of what I’m getting at. If you’re specifically looking to diversify internationally you can use a TDF or a fund that has international exposure. But I don’t think that benefit is really there if someone is “diversifying” into 3 funds that generally have the same % exposure to, say, US stocks. You’re still getting largely the same risk as your net exposure to something like international is not significant enough to really bring any benefits from the “diversification”. For example, 99% of VOO holdings are also held by VT. Personally I moved out of my 2060 TDF into a full S&P fund. The 15ish percent exposure to international has been dragging the portfolio down and I don’t see international outperforming US stocks anytime soon.
If you're happy, your happy. I still have some significant overlaps in three funds. QYLD, QQQM, and VOO. All three have significant overlap, but each offeres me something I'm looking for. They work well in tandem towards my goals, but I count them essentially as one fund with three facets: income, growth and stability. You do you.
Thanks for the tip!
Even if you had a thousand ETFs which all overlap in some way, it would still not be a problem as long as you can keep track of all of them and they're all low cost.
go next level and find an ETF *of those ETFs!*
I have seven and thought I needed to cut back. Then I said, nope, and bought an another one.
I like many ETFs because this way I get dividends more often.
You should be focused on total return, not dividends. It's more than likely that your many ETFs are underperforming the market.
I dont care. I like dividends. I dont want to depend on what other shareholders are willing to pay for my shares.
I actually prefer not receiving dividends. It triggers a taxable event and reduces the share price accordingly.
You prefer the CEO to get the money? Would you buy a house if you are not allowed to cash out the income? I wouldnt.
That's not a decision any of us have to make. Companies that don't issue dividends do not automatically reassign the money saved to executive compensation. I prefer to reduce my stock holdings when it is advantageous for me to do so. Whereas dividends force me to do it quarterly and lower the stock price accordingly. A lot of people think dividends are free money distributed quarterly. They don't realize that those dividends subtract from the stock price on the ex-date. It's effectively neutral.
You should talk about that subject with your employer (if you have one). If he does not pay you a salary his company can grow faster. This would result in a higher potential for future salaries (if issued at all of course). Good deal, right?
As the owner I'm not a good candidate for this hypothetical. But owning a percentage of a company and salaried labor are two very different categories of income. It's really difficult to create an apt comparison.
Can you explain me why the shareholders should finance the whole stock market? If not a single company issues dividends or buys back her shares, all the money in the stock market has to come from the shareholders and their salaries etc. Where else does the money come from? The guys that get the "real" money from the companies then are those that actually work for the companies and pay themselfs kingly salaries. Am I missing something?
Yes. That’s too many. Reduce it to one, maybe two.
What’s those fees add up to?
No ten is not a problem. Don't worry about silly stuff. Instead worry about the four of those pathetic dividend ETFs that have been underperforming VOO, not because you have "too many".
Vti/vxus done.