I’m pretty sure I’m sitting the market out for a bit, but is there an index fund, where you can delete certain stocks from it?

EG, I think Tesla and Twitter and FB are all too high risk.

I don’t believe you can adjust the stock portfolio of any mutual fund. After all, that’s what you pay the brokerage firm for...

If I recall correctly, with M1 Finance you can develop your own personalized ETF. Might help you achieve what you are looking for.

You can buy an index fund and short the specific stocks in the right proportion.

I don't think Tesla is going down as it just became part of the S&P 500 so mutual funds that track the S&P 500 are bound to keep it.

Schwab has a function called “slices”. You can pick any stock in the S&P 500. Pick your favorite, Doesn’t matter the price. Can’t afford 2k for a share of Goog ? No prob throw $50 at it and get a fractional slice of a share. Can buy 1 stock or build your own mini mutual fund. No commissions

There’s also ETF that track subsets of the s&p. There one that invests just in the 50 largest so if you want just the mega caps

I have very little invested in S&P 500 index funds because they index is based on market cap, so the big tech firms, most of which I despise and think are ripping everyone off, make up most (or at least a very major part) of your investment in an index fund.

I transferred funds into my Roth for 2021 contribution a couple days ago

Decided on getting into SPHQ (S&P) for a long term aspects. At same time I got some Welltower investments, 50 shares of each. Both pay dividends for growth and stability aspects. I have some other riskier positions I needed to compensate for

Oh, I think Tesla will succeed as a company. I think they’ve turned the corner, and have tremendous potential.

I just don’t see them coming anywhere near a sound market valuation for awhile.

I realize I don’t understand the market - so I just have play money in it.

I understand traditional investing. I personally try to avoid getting into the middle class version of “numbers,” which seems to be much of the stock market.

No one has ever successfully timed the market on a regular basis and it's mistake to even try.

quote:

Originally posted by Rey HRH:
You can buy an index fund and short the specific stocks in the right proportion.

That, or fiddle with options to do the same thing. Not sure it would be worth the time or trouble.

RE: right proportions. There's the rub. Here's a list of the components and their weighting in the S&P 500

The weights sum up to 100, so the Weighting number is number of percentage points each stock makes up of the index's value. If this list is right (it's the Internet.....maybe it's right) then AAPL is a little under 7% of the index, TSLA's and FB are each about 2% and TWTR (way down the chart at #144) is about 0.13% of the value. So overall, those four are about 11% of the S&P 500's. If you're right and they're overvalued, if that music stops that could whack the S&P500.

Another approach might be to look at an equal-weighted index of those 500 stocks, the " S&P500 Equal Weight Index , where each stock makes up 0.2% of the index. A plunge in just the four stocks you believe are overpriced, relative to the other 496, would have very little impact on that index.

I don't know about specific stocks but you can get indexes that have deletions. Or offer different component values based on unweighting the hicap stocks. or overweighting the low cap ones.

quote:

Originally posted by Flash-LB:
No one has ever successfully timed the market on a regular basis and it's mistake to even try.

Not true. Maybe you don’t know some one who has done it, but it has been done

Fidelity has a number of Select Portfolio mutual funds. Airlines, heavy transport, consumer goods, etc. You can get exposure in areas you want within a managed fund. Not exactly what you want, but it does put pros in charge while offering exposure to a slice of an industry.

I told our guy that handles our investments that I want nothing in a certain company’s stock. I explained my position and he has excluded them from our portfolio.

That's not an index fund.

You might look at an equal weight S&P 500 ETF like RSP. It doesn't exclude names like Tesla, but it weights them all equally. However, performance compared to it's non-equal weight counterpart, well, it lags.


TS

also look at the Extended Market Index ... pretty much all the stocks MINUS the 500 largest -- so your ultra huge tech companies would be excluded

so its basically a Midcap fund w some small cap also

VEXAX

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Why not pick a handful of stocks from different sectors you DO want?

There is such a thing as over diversified.

I just want to put this out there, but my robo-advisor returned 46.3% in 2020 (time weighted returns). Algorithms work apparently.

I'm using Wealthfront. Send me an email and I'm happy to share a referral code that gets us both free money.

This message has been edited. Last edited by: Aeteocles,