[Ran]

If you are sticking to stocks only, a lot of options you will be given will be variations or subsets of VOO (like growth stocks or value stocks which overlap with the 500 stocks in VOO).

If you want true diversification with no overlap, you can go for a fund like VXUS which is a broad international fund.

Or if you want to do US stocks only you can go small caps through the S&P 600 which is SPSM or Mid Caps through the S&P 400 which is SPMD.

Considering you are new, I would still stick to VOO for the most part and just add some of these funds as only 20-25% of your portfolio.

Note: If you want diversification through bonds you can go for a broad based fund like BND.

[Shawn]

You want s&p 500 funds? Like more than one? That’s like asking people their favorite kind of water.

Everyone has some but they are basically identical.

Some people like Fiji or Poland Springs but most of us realize it’s all the same and choose to think about other stuff.

[Steve]

It depends on what you’re trying to do.
Typically people will want to diversify into a different type of fund, like international, small caps, commodities, etc.

By doing this you are hedging that some areas of your portfolio will do better when the S&P is down.

(This worked great when inflation struck if you had commodity funds because they spiked when the market was down or flat, so if you were retired and selling something for your income, you were selling your commodity shares.)

By buying more of an S&P stock, you’re not diversifying but trying to outperform your base fund.

This usually makes less sense, but can get you better returns with a limited downside.

Essentially you’re saying “VOO is great, but I think they should have more NVDA, so I’m going to buy it myself and try to outperform them.”

(Not to recommend NVDA, but it’s one of those many stocks that blew up and made a lot of people happier than if they only owned VOO.)

[Author]

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