Small Cap Index Fund ETF instead of S&P 500 Index Fund ETF

Discussion of the Stock portion of the Permanent Portfolio

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robtkatz
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Small Cap Index Fund ETF instead of S&P 500 Index Fund ETF

Post by robtkatz » Wed Dec 31, 2014 5:54 pm

For my Permanent Portfolio Stock Allocation, I'm using, IJR: iShares S&P SmallCap 600 Index Fund ETF instead of IVV: iShares Core S&P 500 Index Fund ETF.  Is that a good substitute?
Last edited by robtkatz on Thu Jan 01, 2015 2:00 pm, edited 1 time in total.
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Pointedstick
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Re: Small Cap Index Fund ETF instead of S&P 500 Index Fund ETF

Post by Pointedstick » Wed Dec 31, 2014 6:09 pm

The more stocks from the more categories in your index, the better. So 600 is better than 500, but only small caps is worse than all the stocks in the S&P 500. I'd stick with a broad market index for a traditional PP.
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Re: Small Cap Index Fund ETF instead of S&P 500 Index Fund ETF

Post by Ad Orientem » Thu Jan 01, 2015 12:53 pm

Pointedstick wrote: The more stocks from the more categories in your index, the better. So 600 is better than 500, but only small caps is worse than all the stocks in the S&P 500. I'd stick with a broad market index for a traditional PP.
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Re: Small Cap Index Fund ETF instead of S&P 500 Index Fund ETF

Post by Kbg » Thu Jan 01, 2015 1:56 pm

Or just split the difference and go with a mid cap index.
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Mike59
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Re: Small Cap Index Fund ETF instead of S&P 500 Index Fund ETF

Post by Mike59 » Sun Jan 04, 2015 9:08 am

robtkatz wrote: For my Permanent Portfolio Stock Allocation, I'm using, IJR: iShares S&P SmallCap 600 Index Fund ETF instead of IVV: iShares Core S&P 500 Index Fund ETF.  Is that a good substitute?
Personally I don't like using small caps for one reason- the volatility is too high relative to other Permanent portfolio holdings. In a severe downturn you may be forced to rebalance into stocks earlier and possibly more times than with large caps. I feel more comfortable sitting near 25%x4 where possible but maybe that's my own phobia.  I am a fan of VT and its exposure to  6000+ stocks.
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