Which ETF doesn't matter so much as why you are investing and what you expect to get out of it. Setting goals and managing them is more important than anything else.
I don't know where you live, but investing is more than just about buying shares in a fund. There are a lot of questions around income, budgeting, taxes, and retirement planning that you should figure out before you jump into the deep end. In particular, sorting out the tax-advantaged savings options (e.g. in the US this would be things like IRAs) is very important.
Some people become so obsessed with tracking ETFs that they collect them like Pokemons, thinking that more ETFs lead to higher returns. This isn't the case. I would argue that most people aren't really equipped to construct their own portfolios, and should instead just buy a target date fund, which is a kind of mutual fund (similar to an ETF, but with some advantages) that contains a complete portfolio in just one fund, with a risk level that automatically adjusts to your age; or at the very least an asset allocation fund (which is also a complete portfolio, but with a static allocation; examples include he AOR ETF, and Vanguard's LifeStrategy funds).
There's so much to cover here that won't fit in a single comment, so I recommend instead you do some reading. One of the best books I can recommend on this is The Bogleheads' Guide to Investing. It's an easy read that tells you everything most retail investors need to get solid returns with low risk.
The three-fund portfolio is my choice. Total market funds give you complete diversification and exposure to all global markets. It's based on the teachings of Jack Bogle, co-founder of Vanguard.
To start to learning, the Bogleheads wiki is great, but I also recommend getting The Bogleheads' Guide to Investing, written by the guys who started the movement.
Nice work! I'm a data junkie too! If you like data the combination of RStudio and Tidyquant allows you to pull returns for all the data on yahoo! I wrote about it on my blog (where I store results of stock screens) https://wordpress.com/home/dailyscreenz.home.blog
Unfortunately, FAs are mainly commission motives, they may not suggest best for you, but suggest what is best for them (commission basis) which will give you nominal returns to you.
This is personal finance/planning question, visit r/personalfinance (best) r/fatFIRE (if you are wealthy) etc. Additionally, visit bogleheads forum. You will learn a lot from above blogs.
Near retirement, you need to have stable ETFS, preferably index ETFs or similar mutual funds.
Read a book (used book $1.43+shipping) like this to start https://www.amazon.com/Charles-Schwab-Guide-Finances-After/dp/0804137366
Consider moving funds from 401k to Traditional IRA, Roth IRA and periodic Roth conversion (at lowest tax rate - avoid tax as much as allowed by IRS).
Important: Never loose your hard earned money.
Good Luck.
You may benefit from reading this book by John Bogle. The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns.
My summary: Can you find funds/etf's/people that have beaten the market over the last year? Yes! Can you find some that have beaten the market over the last five years? fewer, but yes. Can you find some that have beaten the market over the last 25 years? Yes, there are just a tiny handful.
Now, can you predict which ones will do it over the next 5, 10, or 25 years? It's nearly impossible. So buy the overall market with the lowest expense ratio possible to keep the most of the what the market provides.
Intelligent investor is pretty heavy going in terms of reading. Personally I’d avoid individual stock picking unless u know what ur doing.
I’m UK based so this book may not be relevant to you but I found it gave me a grounding in the subject at a level i could understand:
No quizzing involved - the better question I guess is was it helpful?
The book does a pretty good job of looking at correlations between factors and beta, and some of Sharpe ratio (a method of gauging risk adjusted returns between portfolios. If everything is correlated, then everything is going to tank at the same time right? What if you could get stuff that goes up, when others are going down? The book is so nice about it, that it gives a matrix with correlations between factors (accurate at time of print).
(same with Black Swans - https://www.amazon.com/dp/069206074X?psc=1&ref=ppx_yo2ov_dt_b_product_details )
Think of factors as a quality of a company - it's cheap, profitable, and small - what are the chances long term that it can perform better than an expensive, barely profitable, large company? :-)
On my android phone I use Investfolio it's not that great, but it was the only one I found that can deal with ETFs in different currencies and that has all ETFs listed that I own. And it's nice that it shows the average buy price as well as points I bought at in the charts.
Might be more relevant for non-US investors though. US ETFs are over represented in portfolio apps.
"Lifecycle Investing: A New, Safe, and Audacious Way to Improve the Performance of Your Retirement Portfolio"
https://www.amazon.com/gp/product/B003GYEGK2/ref=ppx_yo_dt_b_search_asin_title?ie=UTF8&psc=1
Not specific to ETFs, but I personally love the idea of using leverage.
I’d recommend starting as simple as possible. That would be:
1 Total US Stock Index.
2 Total International Stocks Index.
3 Total US bond fund
If you’re young, then most people’s thinking is that you don’t need bonds. I’m 44, and I have about 15% of my portfolio in bonds.
I’d tilt the stocks toward the US something like 75 / 25, but a lot of people go 60 / 40 and many go 100/ 0.
Selecting a broad index is going to give you the average return If the whole market and reduce your temptation to buy and sell to move money around chasing sector returns.
I’d recommend Reading this book:
The Simple Path to Wealth: Your road map to financial independence and a rich, free life https://www.amazon.com/dp/1533667926/ref=cm_sw_r_cp_api_glt_i_H31F4F68GEAW8SX1W7Q7
Here's what I was trying to point out, but by Schwab so probably more intelligible!
VTI to track the entire US market. Historically it offered a slightly better performance than VOO (or SPY). For large index funds Vanguard appears to be the best performing and least expensive... Compare VOO and SPY, as an example.
You're going to want consider tax implications, and if the money should go towards education, a 529 might be the best option. https://www.fidelity.com/529-plans/overview
IRA is also a great option, personally I would try to figure out how to best deal with tax implications, do that the child wouldn't have to worry about paying some crazy taxes in 20 years. I'd rather pay taxes now than later, because I know current rate and have enough income to cover, so probably something like a custodial roth IRA. https://www.schwab.com/ira/custodial-ira
Read this book: The Simple Path to Wealth and do what it says. Invest 15 to 50 percent of what you make into a low cost market index. VTI is a favorite of many (which is the Total Stock Market Index).
Do this every month. Don't panic sell when the market drops. The market will drop, sometimes a lot, a few times during your investing lifetime. Those are great opportunities to buy more when stocks are on sale.
Some people start with a few ETFs and keep adding more and more and eventually have 10, 20, or more ETFs. That's probably not optimal and will usually underperform owning one or two of the best long-term ETFs. Simplicity is often the best path to long term growth.
You're starting early. If you get on the right path, you will likely have a great retirement if you're diligent about it every month.
Look at this chart of the EUR-USD exchange rate for the last year.
EUR 1 = USD 1.10 a while ago, then EUR strengthened so EUR 1 = USD 1.20 now.
If you bought an unhedged ETF back when EUR 1 = USD 1.10, its value now is ~8% lower due to the exchange rate changing.
If the Nasdaq 100 (in USD terms) rose by 5% in that time, your investment would actually be down 3% (in EUR terms).
A hedged ETF aims to reduce or eliminate the effect of exchange rate changes. With the example above a hedged ETF would be up ~5% (in EUR terms), similar to the Nasdaq 100 return in USD.
You're getting ahead of yourself, in my opinion; this is like asking "what engine should I get" before you have learned what a car is or even how to drive one. Instead of asking what an ETF is, you should learn about what investing is. A good place to start is A Simple Path to Wealth by J. L. Collins, but there are many other books by authors such as John Bogle and Taylor Larimore.
Morningstar was a big help when I first got started. They have a ton of articles about ETFs, strategies, and a lot of very helpful fund analysis.
My local public library has a membership so I’m able to use it for free from home.
One piece of advice I got years ago is that it’s okay to buy some “fun” ETFs too. You may be putting the bulk of your money into total market, target age, value, etc funds with low expense ratios but it’s still okay to own a few ETFs that you just like to watch.
Robotics, marijuana, Dogs of the World, obesity, solar, an actively managed Asian emerging markets fund, leveraged, REITs...
Setting aside 2-3% of your Roth money to spend each year on frivolous funds doesn’t leave you exposed but it does get you engaged and allows you to own something unique, volatile, or high fee without getting a stomach ulcer.
Take the time to read up on this subject then.
Try to find this book in German or English if you can’t. Reading it tells you everything you need to know about investing for retirement.
Sure. I invest according to this book.
https://www.amazon.com/Smarter-Investing-3rd-edn-Decisions-ebook/dp/B00GAYHH8I
I invest in global equities to capture developed and emerging markets (SWDA and EMIM), REIT (BGPSEAA) and a small amount of globally allocated investment grade inflation linked bonds (SGIL) which I will probably sell and reallocate into equities. I have a small holding in the MSCI world momentum factor ETF (IWFM) too, hopefully to juice it up a bit.
Set and forget, aiming for broadly diversified low cost ETFs and atleast a 15-20 year time horizon.
“Investing in something you believe in” needs some caveats. You need to have a clear, critical analyses that underpins why you believe in an investment. It can’t be a cliche like, “I buy stock in toilet paper because people will always need it, right?” That is not investing. It’s speculating at best and more akin to gambling.
Spend the time doing the research now. I recommend this book for starters.
https://www.amazon.com/Smarter-Investing-3rd-edn-Decisions-ebook/dp/B00GAYHH8I
I do think you should invest in BND. But I also think that you should try to understand what it is. Most of the complexities around bond relate to how the entire modern financial system operates, especially with regard to debt, but bonds themselves are simple to grasp. This is an excellent book that can teach you the basics, including everything else about how long-term investing works.
Not saying you should become a full on boglehead, but this book has a lot of great info:
You're you and investing which is a great first step. Keep it simple with 2-3 ETF's and keep investing each month.
When the market drops (not if, but when), don't sell. Buy more. There will be a few significant market corrections during your life. Think through how you'll handle them now before they come. Most people that sell because of fear lose more money than those that hold on...because they miss some or most of the recovery.
Low cost index funds are the least risky and often one of the best ways for long-term growth. Consider 50-70 percent of your investment going into VTI or similar. The higher costs of many other funds/ETF's will eat away at your profits over the long term. Consider 20 percent in VGT.
Take 30 percent of your money and consider other more risky investments like ARKK, ARKG, etc. Higher risk can lead to higher reward. The ARK funds have enjoyed an amazing run for the last number of years. They may continue to outperform the market. They are risky. Sometimes risks pay off.
Read this book: https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926/
The advice in the book is excellent. He's very wise and talks about much more than what ETF to pick. One of my favorite books for beginning investors as well as the ones that have been doing it a long time and wasting money on high expense ratios or fees.
It's very good advice. Next on your list should to be to buy The Bogleheads' Guide to the Investing to learn about long-term investing, IRAs, tax efficiency, asset classes, bonds, and so on. According to the authors, the three-fund portfolio has the following advantages:
> * Diversification. Over 10,000 world-wide securities. > * Contains every style and cap-size. > * Very low cost. > * Very tax-efficient. > * No manager risk. > * No style drift. > * No overlap. > * Low turnover. > * Avoids "front running." > * Easy to rebalance. > * Never under-performs the market (less worry). > * Mathematically certain to out-perform most investors. > * Simplicity
A lot of people in this sub will suggest other options that seem "more aggressive", but also come with considerably more risk (i.e. chance of losing value).
A lot of people who are young can afford to experiment (and possibly fail) a bit with setting aside a small amount of their wealth in some speculative things, but I wouldn't recommend anything more than 5%. The ARKK funds are an example of speculative (ARKK etc.). If you want tech, don't do QQQ, which isn't a tech-sector fund (it tracks the NASDAQ 100); I'd pick VGT.
But there's already plenty of aggressiveness in a pure VTI/VXUS portfolio.