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.

Outlines

00:00

💼 Building Long-Term Wealth Through ETFs

The first paragraph emphasizes the importance of a strong core for a long-term investment portfolio to reduce volatility and ensure consistent returns. It highlights the wisdom of investors like Warren Buffett on patience and diversification. The speaker introduces the concept of ETFs, or Exchange Traded Funds, as a diversified investment tool that can range from broad to focused baskets of stocks. The video promises to discuss five top ETFs that can anchor a portfolio, and the speaker reminds viewers that he is a CPA, not a financial advisor, urging them to take the content as informational rather than financial advice. The video is sponsored by The Motley Fool, offering resources for investors and a promotion for their '10 best stocks to buy now'.

05:00

📈 Top ETFs for Diversification and Growth

The second paragraph delves into the specifics of the first two ETFs: the Vanguard S&P 500 ETF (VO) and the Invesco NASDAQ 100 ETF (QQQM). VO is presented as a foundational investment, owning a piece of 500 top US and global companies, with a significant focus on technology and health care sectors. It has a low expense fee and has shown substantial growth over the past decade. QQQM, a growth-focused ETF with a lower expense ratio than its counterpart QQQ, is heavily invested in the technology sector, offering high exposure and growth potential. Both ETFs are discussed in terms of their assets, performance, and top holdings, which include major tech companies like Microsoft, Apple, and Amazon.

10:01

💰 High Dividend and Broad Market Exposure ETFs

The third paragraph introduces three more ETFs: the Schwab US Dividend Equity ETF (SDD), the iShares Core High Dividend ETF (HDV), and the Vanguard Total Stock Market ETF (VTI). SDD is a favorite for its dividend yield and growth, providing a balance to technology-heavy ETFs. HDV is highlighted for its focus on quality and stability, offering a higher income stream from mature, high-dividend companies. Lastly, VTI is presented as the ultimate diversification play, giving investors a stake in every public company in the US. The paragraph discusses the sector breakdown, top holdings, and the rationale behind choosing these ETFs for long-term, buy-and-hold strategies.

Keywords

💡Investing

Investing refers to the act of allocating resources, such as money, with the expectation of generating an income or profit. In the context of the video, investing is the primary activity for building long-term wealth, with a focus on strategies like diversification and patience, which are essential for consistent results.

💡Portfolio

A portfolio represents a collection of financial assets, such as stocks, bonds, ETFs, and cash equivalents, held by an investor. The video emphasizes the importance of having a strong core to one's portfolio to reduce volatility and ensure consistent returns, which is a central theme for long-term wealth building.

💡Volatility

Volatility in finance refers to the degree of variation of a trading price series over time. The script mentions that a strong core in a portfolio can 'wean out some of the volatility,' meaning it can mitigate the risk of large price swings that can affect investment returns.

💡Warren Buffett

Warren Buffett is a renowned investor and the chairman and CEO of Berkshire Hathaway. The video references Buffett's philosophy on long-term wealth building, highlighting patience and diversification as key principles, which aligns with the video's theme of investing in ETFs for consistent growth.

💡ETFs (Exchange Traded Funds)

ETFs are investment funds that are traded on stock exchanges, much like individual stocks. They are designed to track the performance of specific indices, sectors, commodities, or a basket of assets. The video discusses ETFs as a means to diversify a portfolio, with examples provided to illustrate their role in wealth building.

💡Diversification

Diversification is a risk management strategy that involves spreading investments across various financial instruments, industries, or other categories to reduce the impact of any single investment's poor performance. The script explains that ETFs offer an easy way to achieve diversification, which is crucial for long-term wealth accumulation.

💡Vanguard S&P 500 ETF

The Vanguard S&P 500 ETF (VO) is an investment vehicle that tracks the performance of the S&P 500 index, which consists of 500 of the largest U.S. companies. The video recommends VO as a starting point for every portfolio due to its broad exposure to top U.S. and global companies, emphasizing its low cost and solid diversification benefits.

💡Sector Breakdown

A sector breakdown refers to the distribution of investments across various industry sectors within a fund or portfolio. The script provides sector breakdowns for different ETFs, illustrating how they allocate assets to areas like technology, health care, and financials, which is important for understanding the risk and growth potential of each ETF.

💡Dividend Yield

Dividend yield is a financial ratio that shows how much a company pays out in dividends each year relative to its stock price. The video mentions the dividend yield of various ETFs, such as the Schwab US Dividend Equity ETF (SD), highlighting it as an important factor for investors seeking income from their investments.

💡Buy and Hold

A buy and hold strategy is an investment approach where an investor buys stocks or other securities and holds onto them for a long period, regardless of market fluctuations. The video's focus is on ETFs suitable for a buy and hold strategy, aiming for long-term growth and wealth accumulation.

💡Generational Wealth

Generational wealth refers to assets that can be passed down through multiple generations of a family. The video's theme of building long-term wealth is closely tied to the concept of creating generational wealth, suggesting that the discussed ETFs can contribute to wealth that lasts beyond an individual's lifetime.

Highlights

Importance of having a strong core in a portfolio for long-term wealth building.

Diversification is key to mitigating risks in investment.

Transcripts

when it comes to investing in building

long-term wealth it's very important to

have a strong core to your portfolio not

only does this wean out some of the

volatility but it gives you consistent

results year in and year out great

investors like Warren Buffett over the

years have talked about the importance

of Building Wealth long term and a few

ways they do this is through patience

and diversification one of the easiest

ways to diversify your portfolio right

from the start is by investing in ETFs

or exchange traded funds

ETFs can be thought of as a basket of

stocks you could have larger baskets

where there's hundreds or even thousands

of stocks within an ETF or smaller

baskets where maybe you see 30 different

stocks within a particular ETF you could

have dividend focused ETF or growth

focused ETFs or even sector focused ETFs

there are thousands of options out there

but in today's video we're going to talk

about five of the top ETFs in my opinion

alone and all of these ETFs differ in

some shape or form and could help anchor

your portfolio so before we begin do me

a huge favor click that like button down

below subscribe to the channel so you're

notified anytime we drop new content and

let's jump into

[Music]

it hey everyone Mark rusen here back for

another video as always I'm a CPA and

not a financial adviser so please do not

take this as Financial advice and before

we begin let me thank today's video

sponsor which is the mle fool the mon fo

has a ton of great resources and

products available for investors of all

different levels and right now if you go

to fool.com forward slm Mark you could

sign up to receive their 10 best stocks

to buy right now all right let's jump

back into today's video taking a look at

five of the top ETFs to help anchor your

portfolio beginning with the first which

is the Vanguard S&P 500 ETF stock ticker

vo this is where I believe every single

portfolio should start this is 500 of

the best companies here in the US vo or

an S&P 500 ETF is my top position and

that likely won't change for decades we

are talking about owning 500 of the best

companies here in the US and really

around the world so when we look closer

here at vo it's one of the most widely

owned ETFs it has assets under

management of $1.1 trillion an expense

fee of

.3% making it extremely low cost over

the past decade vo is up 76% and the

dividend yield comes in at

1.4% again vo gives you that ownership

to 500 of the best companies but it also

gives you solid diversification here's a

look at the sector breakdown the top

sectors are technology which is 31% of

the fund followed by healthc care

equating to 133% financials at 133%

consumer discretionary at 11% and

communication Services coming in at 9%

the top 10 Holdings include Microsoft

Apple Nvidia Amazon meta platforms

alphabet Burkshire alphabet Class C

shares Eli Lily and broadcom the top 10

stocks here account for 32% of the ETF

and in total vo has 8 positions and you

may be asking yourself why does this ETF

have 508 total positions doesn't it

track the S&P 500 well as we saw in the

top 10 list there's alphabet on there

twice multiple companies out there have

multiple classes of stocks Burkshire

being one of them and alphabet being one

of them so when you invest in the S&P

500 you're getting broad exposure and

exposure to some of the top companies

here in the US although it has been

growing its technology exposure as that

sector has been booming over the past

year now let's move on to buy and hold

ETF number two which is QQQ M which is

the Invesco NASDAQ 100 ETF this is the

sister fund to the very popular QQQ but

again this is a video focused on Buy and

Hold and although QQQ m is very similar

almost exact to that of QQQ it does have

one thing that we like for Buy and Hold

investors that is a lower expense ratio

as you can see here assets under

management are $23 billion and again

this is a newer ETF so much smaller in

size than that of QQQ which has 255

billion in assets under management the

expense fee though is 0.15% compared to

QQQ having an expense ratio of. 2% over

the past 12 months QQQ m is up 41% and

it has a dividend yield of just

66% so this ETF is focused much more on

growth and heavy exposure to that

technology sector so you are going to

have a lot of crossover when you're

looking at something like vo and QQ qm

so make sure you take that into

consideration before investing here

looking here you could see a breakdown

of those sectors which led by technology

even higher exposure to technology than

that of the S&P 500 50% exposure here

followed by communication services at

16% consumer discretionary at 133%

Health Care at 6% and Consumer Staples

at 6% as well so much heavier focus on

technology and less on the other sectors

there now let's take a look at the top

positions which again you'll see a lot

of similar names that we just looked at

the top dog is Microsoft followed by

Apple Nvidia Amazon meta platforms

broadcom both shares of alphabet Tesla

and then rounding out the top 10 is

Costco the top 10 stocks account for 47%

and total positions here in this fund is

104 so much smaller in terms of size and

much higher in terms of exposure to that

technology sector that brings us to buy

and hold ETF number three which is the

Schwab us dividend Equity ETF stock

ticker

SD you didn't think we were going to be

doing a top ETF video and not mention

one of my favorite or in fact my

favorite dividend focused ETF which is

SCD it just checks a lot of the boxes

there's a lot of different dividend

focused ETFs out there some focus more

on dividend growth some focus more on

higher yield CHD has higher yield than

some of those high yield ETFs and faster

growth than some of those dividend

growth focused ETFs SCD currently has 55

billion in assets under management a

very low expense fee of just

.6% over the past decade SCD is up 110%

it has a dividend yield of 3.4% and a

5-year dividend growth rate of 12% why

do I like SD so much well we just

touched on the dividend component but

another component on why I like it so

much is the fact that it is a great

compliment to the likes of both ETFs we

just looked at vo as well as QQ qm both

of them heavy techn techology exposure

you're going to see here in a second

thatd doesn't have that much in terms of

Technology exposure so this is going to

further broaden out our portfolio so

when the market is rallying and we're

seeing a broad rally SCD is going to do

quite well here's a look at that sector

breakdown where the top sectors include

financials which are 177% of the fund

followed by healthc Care at 15%

Industrials at 14% Consumer Staples 14%

and energy 14% much more broad not

overly exposed to one single sector and

you don't see technology in the top five

as it only accounts for 8.6% ofd here's

a look at the top stocks which include

Chevron Lockheed Martin Verizon

communications Texas Instruments UPS

PepsiCo Cisco Systems Bristol Meyers

Black Rock and fiser the top 10 stocks

account for 39% ofd and in total it has

104 total positions again SD checks a

lot of boxes for me it diversifies my

portfolio it complements the likes of

the S&P 500 ETFs as well as the

technology heavy ETFs it's got a great

dividend yield and strong dividend

growth now let's take a look at Buy and

Hold ETF number four which is the I

shares core High dividend ETF stock tier

hdv let's continue on with another

dividend focused ETF much different than

that ofd or the other ETFs that we've

looked at so far if you're looking more

for stability higher quality but still

some income some higher income here then

hdv is a great spot to look at it

focuses more on quality over growth and

most of that quality coincides with

higher dividend payers taking a look

here you could see that hdv has 10

billion in assets under management it

has a low expense fee of just

8% and over the past decade the fund is

up nearly 50% it does have a dividend

yield of 3.4% when you see the top 10

stocks within this ETF again you're

going to notice that there's going to be

a lot of notable names that you're quite

familiar with but again they're very

mature names so they're not going to be

high flying in terms of growth but more

mature more stable and higher dividends

but first let's take a look at the top

sectors which are LED off by energy at

27% Consumer Staples at 18% followed by

healthare at 177% technology at 9% and

utilities at 8 1.2% much more defensive

sectors but the larger exposure to

energy actually makes this ETF a big

outperformer over the group over this

past month here's a look at the top

stocks which include Exxon Chevron

Verizon communications Johnson and

Johnson Avy Philip Morris MK PepsiCo

Coca-Cola and ultria group these top 10

stocks account for 51% of the ETF and

total positions equal only 81 much more

stable companies there and a different

group different sectors involved there

which again complements the other ETFs

that we've already looked at and that

leads us to buy and hold ETF number five

which is the Vanguard Total Stock Market

ETF stock ticker vti now if you're

looking for diversification and maybe

even some more hands-off then vti is a

great spot to look why is it so

Diversified because with vti you have an

ownership percentage in every single

public company within the US so for

starters again this is a market cap

weighted index or ETF I should say so at

the top you're going to see a lot of

similarity to that of VO because those

are the largest companies here in the US

but the exposure rate is going to be

much less because there's thousands of

stocks to invest in rather than just 500

in terms of assets under management vti

has 1.6 trillion making it a very large

and very popular ETF the expense fee

very low at

0.3% over the past decade vti is up

163% and it has a dividend yield of

1.4% again a lot of similarities with

the S&P 500 ETF but weightings are going

to be a lot lower let's first look at

the sector breakdown where you see

technology as the top sector accounting

for 30% followed by financials at 133%

healthc Care at 12 1.5% followed by

consumer discretionary at 11% and

rounding out the top five is Industrials

accounting for 9 1.5% of the ETF here's

a look at the top 10 positions which

include Microsoft Apple Nvidia Amazon

meta Google Berkshire Google Shares C

Eli Lily and broadcom these top 10

stocks account for only 28% and again

total positions

3,7 and 33 different companies do you

have an ownership percentage in so again

that is the ultimate diversification

play there every single stock in the US

they even have ETFs that invest in every

single public company around the world

that's VT but I like to focus more on

the us as a whole so that's our video

for today five top ETFs to buy and hold

over the long term to help not only

diversify but build that generational

wealth that we're always chasing after

down in the comment section below let me

know what would your top five list be

for Buy and Hold not things we're going

in and out of but something you're going

to buy today and hold for decades let me

know down in the comments section and if

you haven't done so yet make sure you

smash that like button button down below

subscribe to the channel and we'll see

you in the next one take

[Music]

care