Do you know you can own pieces of companies such as Amazon, Apple, or Microsoft with limited risk?
It’s pretty easy actually.
An ETF is known as an exchange traded fund.
These funds own a collection of securities.
ETFs trade in the same way regular stock would.
Advantages of ETFs?
– Lower fees
– Diversification
– Trades similar to stock
This doesn’t mean they don’t there aren’t any disadvantages..
Some of the disadvantages include
– Lower dividend yield.
– Less Diversification (some ETFs focus on individual sectors).
– Some ETFs are taxed higher than others (ETF that holds precious metals).
Overall the pros outweigh the cons.
Let’s go over few well known ETFs:
$QQQ ETF
This is an absolute POWERHOUSE
– It’s up 22.02% YTD
– Its up 80.02% in 3 years
– It’s up 133.5% in 5 years
It’s top 3 holdings are:
– Apple 12.17%
– Microsoft 11.25%
– Amazon 10.88%
Next, Vanguard S&P 500 ETF $VOO
You can’t go wrong with this one.
It’s not as tech focused as $QQQ is though.
Over the last 5 years this ETF is up 55.01%
It’s top 3 holdings are:
– Microsoft 5.99%
– Apple 5.77%
– Amazon 4.49%
VOO was $104 at close of Feb 2010.
VOO close at $255 in April 2020.
And in July 2021 close at $400
Calculation:
400-104/104=284%
Looking for a dividend ETF?
Vanguard’s High Dividend Yield ETF $VYM.
They pay a 3.75% yield.
Don’t expect very high returns in the beginning.
Always remember: “No such thing called Quick Rich Scheme”
Investing about being patient.
Over the last 10 years this ETF is up 115.82%
It’s top 3 holdings are:
– Johnson & Johnson 3.86%
– Proctor & Gamble 3.03%
– JPMorgan 2.97%
Wondering how you can start investing in ETF?
I prepare a FREE guide for you, Click Here to Download.
And if you are ready to take the first step, enroll in my course “Investing For Beginners: How To Invest With Confidence” HERE.