5 ETFs to BUY & HOLD FOREVER

Summary

In this financial advice video, Mark Rusen, a CPA, discusses the importance of a strong core in one's investment portfolio for long-term wealth building. He emphasizes the role of ETFs in diversification and consistency, highlighting five top ETFs: Vanguard S&P 500 ETF (VO), Invesco NASDAQ 100 ETF (QQQM), Schwab US Dividend Equity ETF (SD), iShares Core High Dividend ETF (HDV), and Vanguard Total Stock Market ETF (VTI). These ETFs offer a range of exposure from broad market participation to sector-specific focuses, providing a foundation for building generational wealth.

Takeaways

• 📈 Investing in ETFs is a strategy for long-term wealth building, offering diversification and consistent results.
• 🧩 Warren Buffett emphasizes the importance of patience and diversification in building wealth over time.
• 🏦 ETFs act as baskets of stocks, offering various sizes and focuses, such as dividend, growth, or sector-specific.
• 🌟 The top five ETFs discussed are considered strong core investments for a diversified portfolio.
• 🇺🇸 Vanguard S&P 500 ETF (VO) is recommended as a foundational investment, representing 500 top US and global companies.
• 📊 VO has a low expense fee and a significant asset base, with technology as its top sector and a 31% allocation.
• 💻 Invesco NASDAQ 100 ETF (QQQM) is a growth-focused ETF with a lower expense ratio than its popular counterpart QQQ.
• 💡 Schwab US Dividend Equity ETF (SD) offers a balance of high yield and growth, with a focus on dividend-paying stocks.
• 🛡 iShares Core High Dividend ETF (HDV) is geared towards quality and stability, with a higher dividend yield and mature companies.
• 🌍 Vanguard Total Stock Market ETF (VTI) provides broad diversification by investing in every public company in the US.
• 📊 VTI has a similar sector allocation to VO but with a more extensive range of holdings and lower top stock concentration.

Q & A

What is the importance of having a strong core in a portfolio for long-term wealth building?

A strong core in a portfolio is important for long-term wealth building as it helps to reduce volatility and provides consistent results year after year, ensuring stability and growth over time.

Why do investors like Warren Buffett emphasize patience and diversification in wealth building?

Patience and diversification are key because they allow investors to spread risk across various assets and avoid the pitfalls of short-term market fluctuations, leading to more reliable long-term gains.

What are ETFs and how do they help in diversifying a portfolio?

ETFs, or Exchange Traded Funds, are investment funds that can be bought and sold like individual stocks and represent a basket of stocks. They help diversify a portfolio by offering exposure to a wide range of assets within a single investment, reducing risk and providing access to various sectors or investment strategies.

What are the key features of the Vanguard S&P 500 ETF (VO)?

The Vanguard S&P 500 ETF (VO) is a widely owned fund with $1.1 trillion in assets under management and an expense fee of 0.3%. It provides ownership in 500 of the best US and global companies, offering solid diversification with a sector breakdown led by technology, health care, and financials.

How does the Invesco NASDAQ 100 ETF (QQQM) differ from the popular QQQ ETF?

The Invesco NASDAQ 100 ETF (QQQM) is similar to the QQQ ETF but has a lower expense ratio of 0.15% compared to QQQ's 0.2%. It focuses on growth with heavy exposure to the technology sector, making it a suitable choice for buy-and-hold investors looking for a lower cost option.

What makes the Schwab US Dividend Equity ETF (SDY) a favorite among dividend-focused ETFs?

The Schwab US Dividend Equity ETF (SDY) is favored due to its high yield, strong dividend growth, and a balance between high yield and growth. It has a 3.4% dividend yield and a 5-year dividend growth rate of 12%, making it a great complement to technology-heavy ETFs.