Comparison Vanguards Life strategy (VLS) vs S&P 500 your opinion please!!

tebbins

 Only holding the S&P 500 is silly at current valuations with roughly half its market cap concentrated in tech sectors. I don't know who suggested only holding an S&P500 index fund/ETF,  ignoring context, or that it's an especially global portfolio considering my earlier post about roughly half its earnings coming from the US - in any event this forum is supposed to be the place to learn from those who know or have experience so we should be supportive of people who don't know and aren't experienced. That is what this thread is asking for.

Prism

tebbins said:

 Only holding the S&P 500 is silly at current valuations with roughly half its market cap concentrated in tech sectors. I don't know who suggested only holding an S&P500 index fund/ETF,  ignoring context, or that it's an especially global portfolio considering my earlier post about roughly half its earnings coming from the US - in any event this forum is supposed to be the place to learn from those who know or have experience so we should be supportive of people who don't know and aren't experienced. That is what this thread is asking for.

Well the question is VLS 100 or S&P 500. My thoughts are that the S&P is not geographically diverse as I have it at around 70% revenue exposure to the US. The sectors are pretty reasonable though. VLS 100 is much more diverse and would be less effected by high valuations in any one country market or country specific political issues. 

Its not even close for me - VLS 100 every time over S&P 500

...not that I use either since I use mostly active funds.

tebbins

Prism said:

tebbins said:

 Only holding the S&P 500 is silly at current valuations with roughly half its market cap concentrated in tech sectors. I don't know who suggested only holding an S&P500 index fund/ETF,  ignoring context, or that it's an especially global portfolio considering my earlier post about roughly half its earnings coming from the US - in any event this forum is supposed to be the place to learn from those who know or have experience so we should be supportive of people who don't know and aren't experienced. That is what this thread is asking for.

Well the question is VLS 100 or S&P 500. My thoughts are that the S&P is not geographically diverse as I have it at around 70% revenue exposure to the US. The sectors are pretty reasonable though. VLS 100 is much more diverse and would be less effected by high valuations in any one country market or country specific political issues. 

Its not even close for me - VLS 100 every time over S&P 500

...not that I use either since I use mostly active funds.

I found this source saying an average 37% global exposure for the Russell 1000 from 2007-2015 (https://www.ftserussell.com/research/global-sales-ratio-global-and-domestic-firms), this source saying it's been averaging 43% in the 3 years after that period (https://www.spglobal.com/spdji/en/research/article/sp-500-global-sales/#:~:text=In 2018, the percentage of,43.62% and 2016's 43.16%.). I'm sure I've seen something more recent than that posting at 50:50, alas, not bookmarking useful links is my vice.
In any event I agree to the extent that I'm sceptical of the S&P500 for some of the reasons stated in my post (https://forums.moneysavingexpert.com/discussion/comment/78557056/#Comment_78557056) on @adindas other thread.

adindas

S&P 500 P/E ratio although is arguably overheated it is still below 2001-2002, 2008 - 2009 level.

Just to remind the famous stock market crashes

1929 Great Depression

1987 Black Monday

2001 dotcom bubble burst

2008 financial crisis

And certainly the black swan event the 2020 COVID-19 pandemic.

https://www.macrotrends.net/2577/sp-500-pe-ratio-price-to-earnings-chart.

Albermarle

adindas said:

S&P 500 P/E ratio although is arguably overheated it is still below 2002, 2009 level

https://www.macrotrends.net/2577/sp-500-pe-ratio-price-to-earnings-chart

Which would maybe indicate that a correction is due, but not as dramatic as the multi years slump after the dot com crash, and not  as bad as the 2009 one, as there are more financial controls in place than there was then.
Maybe we will see more of a bumpy sideways movement , but who knows.