Why I'm Not Selling My VOO (Even After This)

Three years ago, I bought VOO. And I'd love to tell you I sat down, did the research, compared my options, and had some actual reason. Nah. I bought VOO because everybody else was buying VOO.

That was it. Every video, every podcast, every guy in a comment section — buy the S&P 500, sit back, relax. I was like, okay. Done. Take my money.

And honestly? It's mostly been great. It's up a lot. It's not paying me income the way something like SCHD does — it's a grower, not a shower of dividends. VOO sits in my growth bucket, basically riding alongside the ETF I'm always talking about, SCHG. I like the position. It's not big. It's working, and I'm good with it.

And look — the advice to just buy the S&P 500 isn't wrong. Warren Buffett put it in his will. His instructions for his wife's money: ninety percent into an S&P 500 index fund, ten percent in short-term government bonds. Just that easy. He's said the pros, with all their research and their fees, mostly can't beat it — and the data backs him up on that. It's not close.

I'll say this, though. You hear people throw around that you almost can't lose holding this thing for twenty years, and historically, yeah, that's been really hard to do. I'm even betting on it myself. But historically isn't a promise. Anybody telling you it's a promise is selling you something.

The Half of the Buffett Quote Nobody Repeats

Here's what I never noticed until recently. Read his actual words. He didn't say buy an S&P 500 index fund. He said buy a very low-cost S&P 500 index fund. And then he told you which one.

Everybody repeats the first half of that sentence. Nobody repeats the second half. And the second half is the entire reason I ended up rethinking this.

Here's the thing nobody told me: when you bought the S&P 500, you didn't buy the S&P 500. You bought somebody's version of it.

The S&P 500 is really just a list — think of it like a recipe. You can't own a recipe. What you own is a fund that some company built to follow it, and a bunch of different companies build them. Most have the same five hundred businesses inside, but a very different price to walk in the door. It's like choosing between two nightclubs — you'll have a blast at both, but one has a five-dollar cover, and the other has a twenty-dollar cover. Which one are you going to?

Exactly. I didn't know that. Three years ago I thought VOO was the S&P 500. It's not. It's one door into the club.

The easiest way to show you what I mean is SPY. You know SPY — it's the famous one, and it was actually the first ETF ever listed in this country, back in 1993. Same index as VOO, same companies sitting inside it, and it costs about three times as much to hold. Not three times as much to buy — I'm talking specifically about the fee, the slice the fund takes from you every single year whether the market's up or down. The investment didn't change at all. Just the wrapper.

There's a Menu, and Nobody Tells You About It

Now, if you already own this stuff and you're just now finding out there was a menu — relax. Seriously, you're fine. You bought the market, and you kept buying, and that's the hard part. Don't blow up a position that's working over a rounding error. I'm not moving a dollar of my VOO over a fee difference, and I'll get to why in a minute.

But if you're starting today — first hundred bucks, or you're about to set up an automatic buy that's going to run for the next twenty years — take ten minutes and look at the menu before you pick. Whatever you land on day one is the one you're living with.

So here's the menu. There are really only four things these funds are trying to do.

The first is the obvious one: just give you the five hundred, as cheap as possible. VOO does that. State Street has one that does the identical thing for a hair less (heads up, they renamed it a few months back, so don't be confused if the old ticker doesn't turn up). iShares makes one too — that's VOO with a different logo on it. There's also a total market fund that's basically VOO plus a couple thousand tiny companies. None of those is changing your life.

The second one is more interesting. In the regular S&P 500, the giants get the biggest slice of your dollar — so you think you're buying five hundred companies, but you're really making a pretty concentrated bet on about ten of them, and the other four hundred ninety are kind of just there. There's a fund that evens that out: same five hundred names, everybody gets the same size slice. It costs a little more, and when the giants are running, it lags — badly. When they're not, it's the one that holds up. I looked at it. Didn't buy it. I get why people do.

The third is the same five hundred, tilted toward a type of company. A growth version keeps the fast movers and dumps the rest. A value version is the cheaper, older, more established half, and it pays you a little more while you're waiting on it. A momentum version only keeps the hundred that have been climbing the hardest. Same recipe — the chef's just got a strong opinion. My growth money is in SCHG; that's my no-apologies bucket, and VOO rides right alongside it.

The fourth is for people who want the five hundred but want it paying them every month. There are funds that hold the index and sell options on top of it to manufacture income — big monthly checks. The catch is your upside gets capped, and that payout is a distribution rate, which isn't the same thing as a yield. It's a check in the mail, but part of that check might be a piece of the house you already own. I still hold a little of this stuff. I do like waking up to the notification that money landed in my account.

The One I Keep Almost Buying

That momentum fund — I want to talk about it for a minute, because it's the one I keep almost buying. I've almost invested in SPMO more times than I want to admit.

I like that it's focused: a hundred names instead of five hundred, only holding what's actually working. That appeals to me, because I don't love owning four hundred companies I've never once thought about.

So why haven't I bought it? Two reasons. First, you look under the hood and that "best of the S&P 500" fund is mostly one sector. It's really just a big bet on tech wearing an S&P 500 label. I'm not knocking it — that's just what it is, and you should know what you're actually buying.

Second, and the real one: these things are the hottest thing in the world right up until they're not, and when they turn, they turn fast, because everybody's sitting on the same gains and everybody heads for the door at the same time. The thing that makes it go up is the same thing that takes it back down.

Now, somebody's going to tell me I'm wrong. That I left money on the table, they might be completely right. But they can't tell the future either. Nobody can. I don't think a flat market is coming, because I think we're in a generational moment with AI — but look at what I just did there. That's me guessing, same as anybody. Even the smartest AI in the world can't tell you what happens next. If your whole plan is built on a number from last year, you're not investing. You're guessing.

Where I Actually Am

Let me tell you where I actually am with all this, because I'm not going to hand you the highlight reel.

I've got about twenty-five tickers right now, individual stocks and ETFs. I want to be under twenty — something more focused. I don't believe in overdiversification, but that's just me, and honestly, I'm not sure I get there.

It's not because I don't know what to cut. It's because cutting costs me money. A bunch of those positions are up — VOO included — and the second I sell, I owe tax on the gain. So I'd be wiring the IRS more money than I already do, just to make my portfolio look neater on a screen.

Why I'm Not Selling

I'm not doing that. So VOO survives. It's working, it's doing its job in the growth bucket, and I'm not eating a tax bill to tidy up a spreadsheet.

And that's the part nobody mentions when they tell you some other fund is better. Better on paper and better after taxes are two different things.

So — that's the coffee I wish somebody had bought me. Nobody's going to sit you down and explain that the S&P 500 comes in six flavors, because there's no money in that. There's money in telling you which one beat the other one last year.

You didn't buy the S&P 500. You bought somebody's version of it. Now you know there's a menu. And knowing the menu isn't about chasing whatever's hot — it's so you quit overpaying for the exact same thing, and so you know which door goes where in your own plan.

I'm twenty-five years late to this conversation. You're not.

Watch the full video above, or on YouTube: https://youtu.be/64QCTMqyokw