My 10 best investments in 2020 using 5 growth, and 5 dividend oriented stock market ETFs.
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Top 5 Growth ETFs:
#1 VT, by owning ONE share of VT, you own the entire, world. You will own every single publicly traded company from US stocks to International stocks and your money will match what the world is doing. So if you believe the world is going to be a better place 30 years from now, this might be a good option to consider. Since this fund was created, it has returned an average of 5.7% which is good, but not quite as good as the US stock market which has historically done 7%. Pro tip: you can own something like 55% VTI, and 45% VXUS and that’s basically VT but slightly cheaper.
#2 QQQ, a VERY popular investment. Today, the hot sector is technology. This ETF is very tech heavy that follows the NASDAQ. You’ll own more than 100 companies. We’re in the age of technology, and this boom can continue for many decades, or it could end this year. Generally speaking, sector dominance is usually temporary or cyclical. It has a beta at 1.13, which means it’s more volatile than the general stock market.
#3 ARKK, it’s sort of like QQQ, except this is much more aggressive and it’s considered an actively managed ETF which means someone is spending day and night looking for stocks to buy versus just passively following an index. Because of that, you have to the human for doing that at .75% or 75 dollars for every 10,000 you invest here. This fund specifically is run by Cathie Wood who looks specifically at disruptive technologies and tries to outperform the market. In the last year alone, ARK has made 65% returns. The Beta for this is 1.47 which means it’s a little more volatile than your average stock.
#4 VOO, a passive ETF that looks at the 500 biggest companies in the US and that’s what it invests in. There’s not much more to say about it other than its closest sibling would be SDY or SPY. SPY was the FIRST ETF to have ever been created in 1993 and it’s another good option to consider because it’s also got a "cooler" ticker symbol which actually may have a positive affect on how it performs according to some studies.
#5 VTI, owning VTI means that every single working person and every single CEO is working super hard to make you money. You can literally walk into any store in America, pick up an item for sale and say “I own this”. But you actually don’t, so don’t do that or you’ll get in trouble. PRO tip: If you buy VOO or VTI consistently, you can set yourself up for the rest of your life. Put in 80% into VTI or VOO, and If you want to “smooth the ride” as JL Collins says, you can add the other 20% into VBTLX for your bonds.
#5 NOBL. If dividend aristocrats can have their own ETF, this is it. In order for a company to be included in this ETF, it has to have increased dividend payments for 25 years or more. It only has a 2.2% dividend yield but with that yield comes a good dividend growth rate of 12% in the last 5 years. With this ETF, you’re going to sacrifice a lot of growth for stability, which for some people is more important than the yield. The expense ratio is very expensive in relation to it’s yield but if you’re older, you may want to consider adding this one.
#4 SCHD, the Charles Schwab US Dividend ETF, with a yield of around 3.44%, super low expense ratio of $6 for every 10,000 invested, it’s cheap to own, and it has grown in value which is what we want to see. It has increased dividends 10% in the last 5 years, and 20% in the last year which is awesome. It pays us quarterly, and, it’s an all around solid dividend ETF.
#3 VIG, the only companies that are in this fund are companies that have increased their dividends for 10 years or more. The dividend yield is pretty small at 1.81% but what it lacks in dividends, it makes up in growth.
#2 VYM, with a current dividend yield of 3.5%, it has returned around 6.7% since it was created, with a super low expense ratio of .06%, it also pays us quarterly from owning 428 stocks, so you will be very diversified. A very good dividend ETF that I’d like to own a lot more of.
#1 SPHD, it has a dividend yield of 5.5%, an expense ratio of .3% (which is expensive) but it pays monthly. Let me know if I missed your favorites!
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