When you spend hours on vanguard.com like I do, you realize how hard it is to get the information you’re looking for. Take for example the bloated Vanguard Total Stock Market Index Fund. The thing is a behemoth, with so much money stuffed into it, it’s a wonder it can even move the needle. Jabba the Hutt comes to mind—you deserve better.
Not to tool on Jabba, but take a look at what you’re really getting yourself into. Consider for a moment the title—Total Stock Market—where you think you’re buying a diversified fund. Not necessarily the case. How can it be when ten stocks account for over a quarter of the size of the fund?
The truth is, there are close to four thousand stocks in the Vanguard Total Stock Market Index fund, and only ten of them make up a quarter of the portfolio. They are the eight hundred pound Jabbas in the room, while the other thousands of companies are the rats they eat. Don’t be a rat.
You don’t want to be smothered by companies deemed valuable when you know how overvalued they are. You want to see the dark side for what it is.
Action Line: Don’t be a stranger. Come back for more tomorrow so I can show you how to make the force be with you. Visit my series on Why Vanguard is Too Big for You.
