5 ETFs You Need To Know

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Quote

"Don't get too greedy and don't get too scared." - Shelby M.C. Davis

5 ETFs To Know

ETFs are one of the simplest and most effective ways to invest (my biased opinion).

Individual stocks can be great, but the majority of people who spend hours a week researching their picks will still underperform the market and waste years of compounding. If you are looking to invest and chill, then ETFs are for you.

For example, I spent the last week skiing in Colorado with friends and family. I can proudly say I did not check the market once.

Was I concerned about my ETF positions? Not one bit, and that's the beauty of ETF investing.

This view and 10" of pow > than worrying about individual stocks.

The Top 5

VTI - Vanguard Total Stock Market ETF

The man, the myth, the legend, VTI.

This ETF includes all traded companies in the US including small, mid, and large caps. If I had to choose a "one-and-done" fund, VTI would be my pick.

Another popular option is VOO which tracks the S&P 500. When you look at the holdings by weight, you will see VTI and VOO are about 85% similar. For that reason, I don’t think it’s necessary to own both (hypocrite alert, I own both).

If you’d like more exposure control to small vs large-cap companies look into a combination of VOO and VXF. VXF is every US company not in the S&P 500, here is a link to read more on it.

VTI Performance:

Holdings:

QQQ - Invesco Nasdaq 100 ETF

This ETF tracks the Nasdaq 100. Many people refer to QQQ as a tech fund (which it is) but it also offers exposure to other sectors including communication services, health care, and consumer discretionary.

Another plus of QQQ is its large amount of volume which provides a very liquid options chain for selling options.

If you don't see yourself utilizing options, consider QQQM which offers a cheaper expense ratio of 0.15% compared to QQQ's 0.20%. If you want to read about the difference a lower expense ratio can make check out this post.

Performance:

Holdings:

SCHD - Schwab US Dividend ETF

For all the dividends homies out there, SCHD and its yield of 3.3% is one to know about. This ETF holds approx 100 companies that are chosen based on four fundamental ratios and have paid a dividend for at least 10 consecutive years.

Another popular dividend ETF is VYM. While I also like VYM, SCHD gets my vote due to having better performance over the last 5 years. (but past performance doesn’t indicate future results)

Performance:

Holdings:

VB - Vanguard Small Cap ETF

The three previously mentioned funds all focus on mostly large cap stocks. Investing in VB can give investors exposure to the smallest 85%-98% of stocks in the market. Buying individual small caps can be risky, so using VB to diversify into these smaller companies helps to reduce that risk.

Performance:

Holdings:

VXUS - Vanguard Total International Stock ETF

Historically, international stocks have not provided as good of a return compared to US equities. That said, investing in international markets is a way to hedge against the US dollar in case things head south (or inflation destroys us).

VXUS offers exposure to stocks located in different areas of the world including China, Canada, the United Kingdom, and Japan.

Performance:

Holdings:

Honorable Mention:

VNQ - Real estate is awesome, but getting 3 am calls about a busted toilet is not. VNQ is an ETF that offers exposure to the real estate sector without the hassle.

VIG/DGRO - While SCHD and VYM are great for those looking for higher dividend yields, VIG and DGRO are worth checking out for those seeking dividend growth.

Conclusion

If you want an investing style that is truly "buy and forget" then ETFs are about as close as you can get. While it's fun trying to pick the next 100x stock, knowing you can throw money in a solid ETF and peacefully cook your burgers on the grill is hard to beat.

I'm not telling you to buy these ETFs. There are countless other great ones out there that aren't on this list. The purpose of this piece is to get the wheels turning and provide you with ETFs you might (or might not) want in your portfolio.

As always, thanks for reading my friend.

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Nothing in this email is intended to serve as financial advice. Do your own research. Thanks for reading, if you have any questions, comments, suggestions, etc. about the email send me a DM on twitter. See you soon!