Passive Investing

dunstonh

- The S&P 500 appears to have significantly outperformed the world trackers from about 2010

How about the period before that when US equities significantly underperformed for many years?

The problem with single sector investing is that you are gambling on that sector being the best all the time. It wont be. Using a period of good growth in US equities is not a good measure as you need to compare the periods of poor growth as well.

A_T

stphnstevey wrote: »

In terms of Passive Investing in a tracker, I have looked at a world tracker vs S&P 500 tracker

- The S&P 500 appears to have significantly outperformed the world trackers from about 2010
- World trackers consist of at least 50% US based companies
- World tracker top 10 holdings are all US based companies
- Any drop in the US market is likely to be mirrored in other world markets, so the extra 50% diversity doesn't seem worthwhile
- World trackers hold such small amounts of other markets (10% of emerging markets), that any upside is not really going to make a significant difference
- World trackers start from about 0.13% OCF (several are higher) were as S&P 500 trackers are half that at 0.07% OCF

Risky to put all one's eggs in one basket. At the end of the 80s Japan was where the US is now with over 40% of the global stock market - now it's down to about 10%

Linton

stphnstevey wrote: »

In terms of Passive Investing in a tracker, I have looked at a world tracker vs S&P 500 tracker

- The S&P 500 appears to have significantly outperformed the world trackers from about 2010
- World trackers consist of at least 50% US based companies
- World tracker top 10 holdings are all US based companies
- Any drop in the US market is likely to be mirrored in other world markets, so the extra 50% diversity doesn't seem worthwhile
- World trackers hold such small amounts of other markets (10% of emerging markets), that any upside is not really going to make a significant difference
- World trackers start from about 0.13% OCF (several are higher) were as S&P 500 trackers are half that at 0.07% OCF

If you take as small a time period as 8 years you can prove anything:
1/1/2002-1/1/2010: FTSEworld ex US +85%, S&P 500 +2%.