Investing in Stocks – What Are The Best ETF Stocks
The stock market is not in the best position right now, despite the recent positive turn of events. There has been a massive economic downturn in recent times, owing to the outbreak of the pandemic. The stock market is volatile, unemployment rates have spiked like never before, businesses are being shut down, economies are suffering, and the world is on lockdown. However, it is still possible to win on the market by investing in stocks. This strategy I will be discussing is going to work for over 90% of the investors who use it, and it is way better than hiring a financial adviser, day trading, or picking the companies you may like.
So, do you have a certain amount of money and are thinking, how will I make this money yield more money? Or what do I do to avoid any losses in the stock market if I invest this there? Well, not to worry because this video was made especially for you.
Hello viewers, my name is Antoaneta, and I am happy to welcome you to yet another edition of my blog, where I will be discussing a strategy for investing in stocks. I will also be talking about four potential stocks you can buy in 2020 that would yield profits in the long run.
So, without much ado, let us dive straight into the business of the day.
What is this strategy for investing in stocks?
Some of you must have heard of it, but the strategy is called the “Index fund strategy.” S&P 500 historical annual returns over decades have returned more positive results than negative. This means that, on average, the S&P indexes have gone up yearly. I would be quick to point out that past successes do not always guarantee future ones, but these recent successes can serve as indicators to investors as to where they want to put their money.
I use these past successes as indicators of the future places I want to put my money. You can picture index funds as a tracker that tracks the performance of a particular market index. For example, if an investor wants to buy shares in five hundred of the USA’s top companies, how would he or she do it? It may sound impossible due to the number of companies mentioned, the cost of a share from each of the companies, and how the investor will be able to keep track of each of these companies.
This is where index funds come in, Index funding helps the investor to buy one or more shares of this index fund, and it will purchase shares of each of these five hundred companies. See it this way, you are investing in the index funds, and the index funds are investing in these companies.
It is also the principle on which ETFs work. Warren Buffet, who some refer to as one of the smartest investors alive, recognizes index funds as one of the smartest ways to invest in the stock market. Index funds are gaining more popularity than actively managed funds, even though it has been around for many years.
Index funds also do not require any level of expertise. So, if you are not skilled in following the market activities closely, it would be better to invest in the market as a whole, through index funding. Even professionals have a hard time beating the market, so they invest in index funds themselves.
Also, you do not lose any money on high fees. Employing the services of a financial adviser or investor might cost you more, so you get to save that cost with index funding. The average expense ratio of index funds is 0.08%, which is excellent.
Now, let me talk about four top ETF stocks you can buy today and start investing in stocks. The values we are discussing here may have a negative return due to the pandemic, but since we are investing in the long run, there is no need to fear.
Investing in stocks – the best ETFs:
SPDF S&P 500 ETF (SPY)
It is one of the most traded ETFs on the market. It was formed in 1993 as the first publicly funded ETF in the United States. Its current trade rate is $291.40 per share. With a dividend rate of 1.99%, and its YTD return is -8.58%. Its 52 week-high is $339.08 , and its 52 week-low is 218.26$. Its ten-year return is 11.59%, and the annual total return history shows that it has more greens than reds. Its current P/E ratio is 19.67, and Price/Book ratio of 3.01. Their top 10 holdings include Apple Inc., Facebook Inc., Microsoft Corp, Amazon .com Inc., and other companies. Their expense ratio is 0.09%. Traders like this fund because it is the most traded and tracks the index funds in real-time.
VANGUARD S&P 500 ETF (VOO)
It was started in 2010. Its current trade rate is $267.46 per share. With a dividend rate of 1.98%, and its YTD return is -8.70%. Its 52 week-high is $311.59, and its 52 week-low 200.55$ is. Its five-year return is 9.08%, and looking at the annual total return history shows that it has more greens than reds. Its portfolio of 99.30% was in stocks. Its current P/E ratio is 17.91, and Price/Book ratio of 2.68. Their top 10 holdings are similar to SPY. Their expense ratio is 0.03%. It is more long term and attractive. Buffet has recommended this fund.
SCHWAB US DIVIDEND ETF (SCHD)
It favours holding stocks and receiving dividends instead of relying on growth and selling your stocks. It tracks DOW JONES US DIVIDEND 100 INDEX. Its current trade rate is $49.76 per share. With a dividend rate of 3.58%, and its YTD return is -11.45 %. Its 52 week-high is $59.56 , and its 52 week-low is 38.83$. Its five-year return is 8.23%, and the annual total return history shows that it has more greens than reds. Its portfolio of 99.96% was in stocks. Its current P/E ratio is 16.16, and Price/Book ratio of 3.05. Their top 10 holdings include Exxon Mobil corp., Coca-Cola co., etc. Their expense ratio is 0.06%.
VANGUARD TOTAL STOCK MARKET ETF (VTI)
It invests in small, mid, and large-cap companies. Many of the companies here are not in the S&P 500. Its current trade rate is $141.16 per share. With a dividend rate of 1.88%, and its YTD return is -11.48%. Its 52 week-high is 172.56$ , and its 52 week-low is 109.49$ $. Its ten-year return is 11.28%, and the annual total return history shows that it has more greens than reds. Its portfolio of 99.96% was in stocks. Its current P/E ratio is 2.48,, and Price/Book ratio of 3.05. Their expense ratio is 0.03%. Its current P/E ratio is 17.36, and Price/Book ratio of 2.48. Their top 10 holdings are similar to SPY – Microsoft, Apple, Amazon, Facebook, Google and a lot more
Since buying one share of an ETF fund gives you interests in many companies, I can say it is a form of diversified investment and is safer than investing in stocks from individual companies. I am not saying you should only invest in ETF or not; it is your choice. Start investing now. For more investment tips, make sure to subscribe to my newsletter.