NOTE - In comparing the S&P 500 to other market indices, it's worth highlighting that every other country has a smaller constituent count, so a higher top 10 concentrated would be expected. While the point I was hoping to communicate was that investing in these international indices would result in less diversification than investing in the S&P 500, this is an important caveat I didn't emphasize in the video. Apologies.

What are the best additions to a $500k portfolio to boost performance? S&P 500 is Up and will do better in 2024 I believe as indicators for profits continue to improve, investors like me believe that “Santa has come early” to the markets.

This is the most dry and straightforward finance channel but I love it. Thank you!

lol, if the s&p 500 crash by 63% it doesn‘t matter in what you are invested at all

I like the plain bagel ❤. You accurately portray just how "boring" stable and reliable investing is. No exaggerated excitement, no " way to make a quick buck", just plain old knowledge.

We are all so blessed to have such researched, nuanced, and simple explanations delivered to our front door for free. Thanks ThePlainBagel!

7:48 well theres also the difference in size. For example the german Inder (DAX) only tracks 40 companies..

I learn SO MUCH from this channel. Thanks, Richard. :)

The video’s title question read my mind! Thanks for sharing your thoughts.

My investment into the S&P 500 isn't active because I expect it to outperform anything. It's passive because it's "a safe bet" and I'll be in the same boat as everyone else. I don't care if I out-perform anyone; I care if I under-perform everyone.

Hello Richard! Can’t get enough of your videos! Thank you!

Richard is one of maybe three KZfaqrs that I will 100% click on every single time I see a new video. Keep up the good work!😀

Friday PB uploadzie? It's turning out to be a great weekend. I utilize S&P500 ETFs, and its been good for me so far, so this is some good stuff to keep in mind. Thanks!

Thank you and thank you, Richard! Cheers from Toronto.

As usual your level of quality is very high, thanks for the vid!

Well done. I appreciate your clear sense of ethics.

Always first class explanation and commentary. Love it.

These videos are always a great refresher at the very least, but more often than not I learn something.

I prefer broader funds like ITOT or VT for the diversification. The S&P had a “lost decade” from 2000-2009, but smaller and foreign companies kept chugging along. Then Europe had a lost decade roughly 2008-2018 and the US was doing well. I couldn’t say what’ll outperform, but the imperfect correlation between market segments can reduce the swings somewhat.

Distillation of information in a concise and straightforward manner without oversimplifying or feeling the need to use buzzwords (which underlines insecurity I think) should deserve a Nobel Prize category, always a pleasure man..

Once you understand the Efficient Market Hypothesis, you realize that unless you can do "price discovery" better than hedge funds and algorithms (hint: you can't), the best strategy is to free-ride on *their* price discovery by sticking to market weights. Buy VT and enjoy life.

Great topic choice. I appreciate you taking the time to break this down.

I've been watching your channel for the last few years and honestly it's always great content. It's like I'm in a college class with how these explanations are!

Thank you! Always learning something new from you

You read my mind😂 yesterday I was wondering this, debating if I should get SCHG when I already have VOO, and worrying about a lot of overlap between the two. I couldn't really put it into words to search for, so it just went to the back of my mind and today BAAM your video shows up in my feed!

As a person who watches your videos on occasion, I was expecting you to state the obvious about the magnificent 7 and agree on the level of concentration. Very impressed you took the time to go a lot deeper than just quoting S&P historical data and actually reviewed alternatives both domestic and internationally. Felt like it gave me a complete understanding. Thank you @theplainbagel

Would have loved to see you bring up the sector weightings when discussing S&P's current multiple in comparison to other stock markets. The S&P has a much higher tech weighting then other global indexes, and then it had historically. Since tech tends to have higher mults this explains a lot. When you look us valuations vs global valuations adjusting by sector, US is not as expensive as the raw CAPE shows.

Great content 👍 one of my favorite finance channels 🙂

Thank you Mr.Bagel! Love this channel!

Great information and well presented. Love this channel.

Love this sort of video, I hope to see you talk about the S and P 500 more

Amazing explanation! Very clear and concise!

Such a good analysis as usual. Thank you for educating us

love this breakdown! the downsides and risks associated with large exposure to the mega cap stocks can be mitigated by total market funds like VTI, which is also the more "passive" move and closer to actual US market. Ben Felix has an excellent video on this

Well researched and presented. Appreciate your video. Thank you.

Thanks for putting the effort into this video, I appreciate it.

Canadians now have access to a variety of internationally diversified index ETFs. This can help if you’re concerned with country concentration. It’s a meme at this point but JUST BUY VEQT/XEQT/ZEQT (or one of the bond inclusive varieties).

Love your videos mr. Bagel. They gave me the minimum requirements for me to do my own research and understand investment books.

I pretty much just go all in on VTI. Its mostly the SP500 since it's weighted by market cap, but I still get exposure to the rest of the US stock market.

Thank you for sharing the info. I’m just getting started with investing definitely would love to hear more info like this!!

I have a 3 fund portfolio consisting of 33% S&P, 33% Total stock, and 33% international. I feel a need to focus on complete growth so I went 100% stocks, but does the SP500 and TSM overlap too much to make sense holding both? However I’ve been in the red for a month now. I work hard for my money, so investing is making me a nervous sad wreck. I don’t know if I should sell everything, sit and just wait but watching my portfolio of $450k dwindle away is such an eye -sore.

Thank you for getting into the details of boring, but important stuff.

Great commentary Richard. I know it’s not financial advice but I’m curious whether you invest in an equal weighted or market weighted S&P500 etf/index for yourself?

Awesome video! Thanks for that!

The concentration comparison with other indexes such as Germany's Dax and France's Cac is not valid since those are much smaller, in this case comprised of only 40 companies, if one would adjust for the size you would get a much smaller reading. If you take a look at the top 10 companies in stoxx 600, which is a closer comparison both by number of stocks and economy size you would get ~20%

Great video. I concur with the fact that investing only in the s&p500 may not be enough. I would diversified with small caps and specific regions (european markets, japanese or indian).

Great video. Thank you for making it.

I'd love to see a video going into the details of large, mid, and small cap investments and their indexes that goes into their historical returns and their place in a diverse portfolio. In recent years large cap has performed the best, but from what you shared here it sounds like that's not a guarantee.

Thanks for the market wisdom!

Thanks! Great analysis and information!

So much good information in this video, thank you !

Very useful video for beginners like myself. I appreciate your guidance

Really usefull and interesting, keep posting geat informational content!

Amazing video! Great analysis and alternatives to SP500!

Excellent content! Great points about the increasing concentration in the indexes, especially the S&P 500, a potential bubble, and the incentives of fund managers. Most people just say to invest S&P 500, but total market funds are a little better diversified. And the S&P may miss out on returns from small cap value stocks and the reduced correlation from international stocks. Plus, since the funds are market cap weighted, the S&P gets you the most expensive businesses, and higher price means potentially higher risk and lower returns. But S&P is a decent option, and it's about whatever works best for each person's goals.

Do you have a specific way you like to be cited or are your KZfaq link/video links enough?

Richard, excelent video. Thanks a ton.

I think an important point with these very large companies echoes what Warren Buffet recently said, and that was that "the larger you get the harder it is to shift the needle". I would love to see what less concentration would actually do to overall growth in the long run.

Great vid. Subscribed.

Thank you. This was helpful.

Thanks for the video :)

Another good education video as always

The concern for bubbles related to index investing is valid, but largely the current and FWD P/Es don't seem unreasonable other than a couple absurd outliers.

Also, check that the fund you invest in physically replicates the index (i.e. by actually buying the shares) rather than synthetically replicating the index by entering into derivatives with counterparties where you are taking the counterparty credit risk. Big difference if things go wrong.

Great insights Thanks

Appreciate your content. Could you do a video on the CANSLIM strategy of investing/trading?

The thing is, active investors should love passive investors. If it is true that passive investors are massively overvaluing certain companies, that's a distortion that the active investors can exploit. The issue is that there are too many active managers to justify their fees, and they should simply find something else to do!

thank you sir. Yes, Small Cap will beat s&p 500 in the longer run

Thank you for this!

I encourage reading the "Tails, you win" chapter in Morgan Housel's Psychology of Money

Ive had this question on my mind recently! Praise be unto the plain bagel!

would love to hear your opinion on holding cash within a portfolio

Now I'm imaging a mrta-index fund that takes positions in the collection of index funds... How much diversification would it be to split one's money among the various S&P indeices? I'm interested in running back the numbers to see how this would have performed compared to having chosen each of them over 10, 20, 40 years.

This is why I invested in a mix of the Russel 2k, a micro cap etf and my favorite one of all the $XBI Biotech etf.

Thanks Richard!

Do you have any recommendations for a more balanced alternative? - sorry, hadn't finished yet, I'll look at your recommendations -

thank you for the intelligent, non-alarmist takes

This is in part the reason why I prefer total market funds like VTSAX to an S&P fund. My thesis as a passive investor is that I can't identify what stocks will be the best to invest in, so I'll buy everything and take the average return. This does mean I'm betting on the overall US economy which I feel is a relatively safe bet, but I've also invested some in international index funds as a hedge.

Great analysis!

Can you do a video about candlestick patterns and predictions? Would love to hear your thoughts

I invest in a global all cap fund . Despite being a global index fund, it’s still heavily concentrated into the magnificent 7

Hey Mr. Bagel question for you: if i got to the store and ask for "two everything bagels with cream cheese, and another but plain" are they giving me 2 et w/cc and a plain with cream cheese, or 2 et cc and a plain everything bagel? thanks

This is a bit of a specific topic but I wonder if you would consider talking about how it's possible for a company to offer a 0% expense ratio index fund, as Fidelity does with their various passive index funds. Is there some hidden risk involved with choosing one of these zero-expense funds versus a traditional fund like Vanguard with some non-zero but small expense ratio?

Hello, thank you for another informative and well-made video. It's incredibly beneficial for young investors such as myself. Watching this video prompted me to consider your thoughts on regulations like those in Belgium. As a Belgian citizen, I'm unable to directly trade CFDs or indices due to government regulations deeming them too risky, despite widespread belief that indices like the S&P500 are among the safest investments available. I'd be interested to hear your perspective on this matter, if you're open to discussing it. Best regards, Jarne

I did a bit of research into how well fundamentals per industry can explain variance in stock prices using a bunch of different methods from simple linear models to neural nets. I did this thinking it would retain more explanative power than statistical models, which lost basically all predictive power once high frequency trading was widespread. The rise of capital inflow inti ETFs is super strongly correlated with the decrease in variance explanation, minus a few sectors. Like, super stark. Like, 420x between 1987-2003 versus 12x between 2003-2019. It was nuts

the issue is whether the stocks in SandP are correlated or not. if they are, expect problems.

Great content

7:52 yes germany has a high concentration of the top 10 stocks, but it only has 40 stocks in total in their country index (dax). S&P has 500 stocks, so this isn't a suitable comparison.

Outperformance in one decade often results in an underperformance in the next. In both of Burton Malkiel's and Daniel Crosby's books they address this and the best process for handling these flat/side-ways or downward periods, namely by indexing with equal weight across international markets and rebalancing annually. I'm totally sold on that idea and have it implemented in my portfolio. Furthermore they both advocate for allowing the speculative side of you to come out but to limit it to 5% of your portfolio; advice I also like.

I'm unsure how to think about currency risks with my investing. I live in the Eurozone, should I buy the S&P 500?

Thank you!

In my taxable accounts, I was DCA'ing VTI, but I've recently started putting my excess money in IJR (S&P 600). In my tax-deferred accounts, I'm running IWM (Russell 2000). S&P 500 is fine, and I think it will do fine, but I think small caps are currently undervalued, have some tailwinds coming, and will have a big resurgence this year or next. When they've had their run, I'll probably go back to VTI, unless the AI thing ends up being a bubble and bursts; then I'd go to the Nasdaq after it deflates

What about holding either RSP (Invesco S&P 500 Equal weight ETF) or EQL (ALPS Sector Weight ETF)? These ETFs are a little more expensive than a regular S&P 500 ETF, but maybe not as up and down? Thanks

Good video, I don't invest in magnificent 7 or in any index etf for the sole reason of it being boring and not entertaining. Analyzing companies and making bets is fun! I don't like gamblig, instead stock picking is much more thrilling and entertaining. More rewarding too!

What about investing in factor funds as a way to combat some of the downsides of investing in a market capitalization weighted index?

Yes, it is very concentrated. At best one might refer to it as the S&P50, but more realistically it is more the S&P25

Enjoy your vids!!

What’s the ticker for the s&p composite 1500 ? I typed in spr and it says something else

Can you make a video on behavioral finance and how most of the people (maybe even 80%) not going to make 10% long term in index fund even though market makes 10%, especially when their account value becomes bigger and they have an access to “sell button”. Thank you!

Good video!