It's a smart approach, given stocks' unpredictable short-term volatility. Buying exchange-traded funds (ETFs) allows investors to own a diversified portfolio with a vehicle that trades like a stock. That means you can readily sell it and get cash.
There's a daunting number of ETFs to choose from these days. Which one is the best to buy and hold for the next decade? Here's why the Vanguard Total World Stock ETF (NYSEMKT: VT) ranks as my top ETF to buy and hold.
This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia.
Continue » The Vanguard Total World Stock ETF invests in both U.S. and non-U.S. stocks. That provides good geographic diversity rather than relying on a specific region to perform well. North America, at about 65%, represented the largest region as of June 30.
Europe, the Pacific, and emerging markets followed, with 13.7%, 11.1%, and 10% weightings, respectively. The ETF has over 10,000 equity holdings, providing lower exposure to individual stocks than other ETFs. The Vanguard ETF's top 10 holdings include familiar names like Nvidia, Apple, and Meta Platforms, but their weights range from 1.1% to 4%.
The top 10 holdings combined have a 20.4% weight. By contrast, the top 10 holdings of an index fund tracking the S&P 500, like the SPDR S&P 500 ETF Trust, range from 1.5% to 8% weightings. These add up to over a 38% weight.
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