Vanguard Small Cap
This podcast covers the historical performance of the small cap value asset class. Paul compares the risk and return covering the last 87 years in 1, 15 and 40 year periods. Learn why he believes that the Vanguard Small Cap Fund is headed for lower future returns. At the end of the podcast he asks listeners to pass this along to friends and family, as well as trustees of their 401k plan if it doesn’t include a small cap value fund.
10 Things You Should Know About Small Cap Funds
This podcast looks at the one year, 15 year and 40 year returns of the Small Cap Index as well as the impact of size, value and diversification on returns. Paul compares the Small Cap Index at Vanguard and DFA, and discusses the problems of active management with this asset class.
In this podcast Paul responds to questions by readers and listeners.
Question #1: In your “Ultimate Buy and Hold Strategy,” you use 40% bonds. What is the impact if you invested less in bonds? How much does a change in bonds change the expected return?
Questions #2: My 401(k) only has three index funds – Fidelity Spartan Total Market Index, Vanguard Small Cap Index and Fidelity Spartan International Index. How would you distribute the investments among the three funds?
Question #3: My 401(k) is run by Schwab, but the investment choices aren’t very good. They offer self direction wherein I can make my own investment choices. Would your Schwab ETF recommendations be a good way to diversify my 401(k)?