One more time. I'm not saying what you are doing is wrong.
I never said you were, so repeating it is totally pointless.
I'm just pointing out that VIMAX is higher risk than VTSAX in the short term.
Hold on -that's the first time you added 'in the short term' which is a
critical modifier to your point. As everyone here knows, the short term performance of index funds are pointless and should be ignored. This makes your new point equally pointless.
But cherry pick most any random short time-frame and VIMAX probably still did better anyway.
You're only seeing one very narrow-sighted, jargon-bent version of the broadly-useful word 'risk'. Risk is
not a synonym for volatility. And actually, people on finance forums
do often use the word risk to mean all sorts of different things to describe various things they're risking.
VTSAX is a whole lot more diversified(3757 companies VS 365)-
You should be on the Fox Business debate stage. heh
From MMM himself on down to a hundred other posters here, VTSAX is considered basically interchangeable with the 500 Index which is merely 503 companies. So while VTSAX
is 8 or 9X more diversified than the 500 or Mid-Cap Index, it's really just disingenuous slight of hand.
VTSAX having 3757 companies is almost totally meaningless compared to the fact that it's SO heavily weighted to the Mega-caps at the very top -market weighting making the 500 Index functionally (almost) identical with only ~40% more companies than VIMAX.
I think studies have shown it only takes about 20 random stocks to be about as diversified as a certain number alone can make you.
lower cost(0.05 VS 0.09),
Both dead low, but the difference has never been in dispute and doesn't itself define greater risk.
has less volatility,
Similar, but again... facts not in dispute.
and has larger companies in it than VIMAX.
I stated that
myself more than once
specifically for your sake! Yeesh.
Fine... ignore my point about the Mega caps in VTSAX/500 Index and don't address my challenge of your claim that market cap apparently equals 'better established companies'.
A little company that's be profitable and around for 100 years is far more stable and well-established than any of the dot-coms that went poof in the 2000's. And I'd argue that Mega-caps like Apple--an insignificant company on the brink of collapse pre-iPhone--and Facebook--a company that doesn't really make anything and could go up in smoke as easily as mySpace did--aren't really safer than dozens of solid, well known, long-time brands you'd own in VIMAX for the same percent of your $$.
VIMAX is higher risk no matter what measurement you use.
That's just not true at all. It's only true by the one version of 'risk' that you use.
I don't know why that requires so much explanation.
Because you don't realize that you're wrong.
The 10 year standard deviation for VIMAX is 17.69. The 10 year standard deviation for VTSAX is 15.55. For reference the SP 500 is 15.06. Lower is better.
Better for what? What are you actually getting? And is that answer really your investment goal??
Those numbers do not
necessarily even define risk. It
is volatility, so just
say volatility and be right 100% of the time. But if you MUST insist on saying it's risk, then you have to understand that it's only one version of risk. And it's a pretty lousy version compared to other factors at risk for an investor.
If you described what you are doing to any professional financial planner or investing professor they would tell you that you are taking on more risk(volatility) for the chance to get higher returns.
I agree that most finance professionals would probably say risk/volatility as interchangeable terms. But they're just parroting the same thing you are and not grasping the important difference.
It would be better for them (you, everyone) to just to say volatility if they're talking about volatility.
Tell me... if you're a buy and holder... what greater
risk is VIMAX vs. VTSAX actually putting you at risk
of?
A possible slightly greater, short term loss
if you're forced to sell at such a rare, random, stupid time? Hardly a solid argument.