No. of Recommendations: 2
Direct indexing works, IF YOU ARE PAYING LOW ENOUGH FEES to do it.
Even 0.09% of assets (9 basis points) may be too much. But eventually you run out of losers to match with the winners and will start to pay taxes on the dividend income.
I looked all over and couldn't find anything about the weightings. They sort of imply that it is cap weighted of the S&P500 stocks that you didn't exclude.
I wonder, couldn't you do essentially the same thing by buying VOO and shorting the stocks that you don't want?
Maybe you don't like tobacco companies. Philip Morris (#38, weight 0.42%) and Altria (#104, weight 0.18%).
On a $10,000 account that's $42 of PM and $18 of MO.
That's silly. They are insignificantly small in the S&P 500. You are just making a feel-good empty statement.
The bit about tax loss harvesting is just deluding the marks.
The fractional shares thing is just funny.
#250 is DHI at weight 0.07%. That amounts to 0.097209 shares.
I could see maybe taking the top 50 stocks (62% of the S&P500) or top 100 (74%) and excluding the rest. That's a lot of work, excluding all 450 or 400 stocks.
The bottom 300-400 stocks might as well not even be there.
