If I had to pick ONE ETF to buy and hold forever..

Summary

The video script discusses the selection of the ideal ETF for long-term investment. The speaker evaluates various ETF categories, including international, broad index, dividend, and growth ETFs. Each is analyzed based on total return potential, volatility, overall risk, and specific reasons for preference. Despite a strong case for dividend ETFs like SCHD and broad index ETFs like VTI and VOO, the speaker's top pick for a forever investment is VOO due to its long-term data and resilience through market fluctuations. The video also encourages viewers to consider their own investment goals and not just follow others' choices.

Takeaways

• 🌐 The speaker prefers a broad index ETF over a specialty or sector ETF for long-term investment.
• 💹 International ETFs like VXUS and SCHY are considered for their exposure to companies outside the U.S., offering diversification.
• 📉 Basic broad index ETFs such as VTI and VOO are staples for a balanced portfolio, offering medium total return potential with low volatility.
• 💰 Dividend ETFs, exemplified by SCHD, provide high total return potential with growing dividends and share price appreciation.
• 📈 Growth ETFs, including QQQ and SCHG, have high total return potential due to their focus on innovative companies, but come with higher volatility.
• 🚫 The speaker excludes international and growth ETFs from long-term consideration due to their higher risk.
• 📊 The speaker values long-term data and historical performance in choosing an ETF for a forever investment.
• 🏆 VOO is selected as the top pick for a forever investment due to its long-term data and resilience through market fluctuations.
• 🔢 The script emphasizes the importance of individual investment goals and risk tolerance in selecting the right ETF.
• 🔗 A link to a video discussing the speaker's favorite specialty ETFs is provided for those interested in sector-specific investments.

Q & A

What is the speaker's approach to choosing an ETF to invest in forever?

The speaker evaluates ETFs based on total return potential, volatility, overall risk, and key reasons for preference. They emphasize that each investor should choose based on their own goals and factors.

Why does the speaker prefer a broad index ETF over a specialty or sector ETF for a long-term investment?

The speaker prefers a broad index ETF for a long-term investment because it provides exposure across various sectors, reducing the risk associated with investing in a single sector or industry.

What are the characteristics of international ETFs like VXUS and SCHY according to the speaker?

International ETFs such as VXUS and SCHY are composed of companies outside the United States, offering exposure to emerging markets. They have a solid dividend yield and are considered to have low total return potential with higher risk.

How does the speaker categorize the total return potential and volatility of broad index ETFs like VTI and VOO?

The speaker categorizes the total return potential of broad index ETFs as medium, with an average yearly appreciation of about 10 percent. Volatility is considered low, with the market experiencing both highs and lows over the years.

What makes dividend ETFs like SCHD attractive to the speaker?

Dividend ETFs like SCHD are attractive because they offer both share price appreciation and a growing dividend, providing a bonus in the form of cash flow that can be used as passive income or reinvested for compound interest.

How does the speaker view the total return potential and volatility of dividend ETFs?

The speaker views the total return potential of dividend ETFs as high, with an average yearly appreciation of over 13 percent since inception. Volatility is considered medium, based on the data available from the past 10 to 12 years.

What is the speaker's opinion on the risk level of dividend ETFs like SCHD?

The speaker considers the overall risk of dividend ETFs like SCHD to be low, as they are composed of value-type companies that do not typically experience drastic drops in value.

Why does the speaker find growth ETFs appealing?

Growth ETFs are appealing to the speaker because they invest in innovative companies that are essential for survival in the market, offering high total return potential with an average yearly appreciation of almost 18 percent for QQQ over the past 10 years.

What are the risks associated with growth ETFs according to the speaker?

The speaker identifies high volatility and medium overall risk with growth ETFs, as they can experience significant gains or losses due to factors like over-leveraging or being outpaced by competitors.

Why does the speaker ultimately choose VOO as the top ETF to invest in forever?

The speaker chooses VOO as the top ETF to invest in forever because it has more long-term data and has weathered more market storms, indicating a more reliable track record compared to other ETFs.

What advice does the speaker give regarding the number of ETFs one should invest in?

The speaker suggests that investors should not limit themselves to just one ETF and encourages diversification. They mention a video that discusses the ideal number of ETFs and stocks for a well-rounded portfolio.