Vanguard Total Stock market ETF to get you started investing. (NYSEMKT:VTI)
If your like most getting into investing, then you may not know where to start. The Vanguard Total Stock Market ETF gives you the ability to reach into the entire market without much risk without any headaches. A great way to invest your money while learning more about stocks and money investing.
Vanguard Total Stock Market ETF (NYSEMKT:VTI) is smart choice, giving investors a way to ride the entire market at a refreshingly low expense ratio. It’s also undeniably popular.
The ETF itself is meant to track the entire U.S. stock market. It owns about 3,500 stocks. However, it is market-capitalization-weighted, which means that larger stocks get more of the fund’s assets. The 10 largest holdings account for around 20% of the overall portfolio.
Vanguard Total Stock Market ETF’s dividend yield is around 1.8%, which is in line with the market’s current low yield. Over the trailing three-, five-, and 10-year periods through year-end 2019, the fund returned 14.5%, 11.2%, and 13.4%,
How to use it
Vanguard Total Stock Market ETF is a solid choice for investors who don’t want to think about picking stocks or sectors.
You will own large positions of stocks in the following, MSFT:Microsoft, AAPL:Apple, AMZN:amazon, FB:facebook, GOOGL:Google, BRK.B:Berkshire Hathaway (WARREN BUFFETS company) JNJ; Johnson&Johnson, JPM: JP Morgan Chase and CO, V:Visa Inc, plus more smaller positions in stocks like Home Depot, United, Coca Cola, Walt Disney amongst the many other companies you will own, FULL list of the companies HERE.
Why you would want to buy
Vanguard Total Stock Market ETF is designed to track the CRSP US Total Market Index, a gauge that tracks nearly 100 of the country’s investable equity market across all capitalizations. This accounts to almost 3,654 different stocks, giving investors a widely diversified portfolio in the click of a button to buy.
This is a market-weighted index, so it’s not as if each of the 3,654 stocks takes up roughly 0.03% of the portfolio. The 10 largest holdings — the country’s 10 largest-cap stocks — take up a hearty 18.2% of the ETF. Basically, if any of the large holdings in the ETF fail, or don’t perform, the entire ETF will suffer, the big players tend to effect the ETF the most, so the top 10 holdings mentioned above are really the gauge of the ETF, while keeping your feet into the rest of the market.
Generally, It’s a great way to buy into the general market without having to dedicate time to researching and tracking individual stocks, but it’s not perfect.