Wall Street wants you to think you need to be a rocket scientist to make money in the stock market. But investing can actually be quite simple. Exchange-traded funds (ETFs) can provide you with all the diversification you need to protect and grow your wealth.
In fact, you can begin to build a solid foundation for your portfolio with just two ETFs. Read on to learn about a low-cost U.S. stock fund and a well-diversified international ETF that could help you profit from the long-term growth of the global economy.
A core U.S. stock ETF is a great place to start
The U.S. economy remains the envy of the world, and for good reason. Strong corporate reporting standards help to protect investors while a relentless focus on innovation and efficiency drives growth. U.S. stocks, in turn, have delivered wealth-building returns of about 10% annually for almost a century. The Vanguard Total Stock Market ETF (VTI -5.00%) offers you a simple, low-cost way to claim your share of this lucrative opportunity.
Vanguard's ETF held positions in more than 3,600 U.S.-based companies as of the end of 2024. It weights these holdings by market value, so a sizable portion of the fund's assets is invested in some of the biggest and best businesses in the world. As of Dec. 31, 2024, industry giants Apple, Microsoft, Nvidia, Tesla, and Berkshire Hathaway counted among its top 10 holdings.
Yet, Vanguard's fund also offers you access to a broad collection of mid-cap and small-cap stocks. True to its name, the Vanguard Total Stock Market ETF can thus provide you with an easy way to profit from the success of a wide range of U.S. businesses of nearly all sizes.
Better still, Vanguard has consistently worked to reduce fees to better serve investors. Its funds are thus some of the most affordable in the mutual fund industry. The Vanguard Total Stock Market ETF features an ultra-low expense ratio of 0.03%. That means you'll pay only $0.30 annually for every $1,000 you invest in the fund.
Vanguard also strives to make its products accessible to all investors. The Vanguard Total Stock Market ETF has a minimum investment of just $1.
Global gains could be yours with this ETF
A fund that invests in businesses based outside the U.S. can expand your profit opportunity to include an even broader swath of the global economy. Such an ETF could also provide an additional layer of diversification to your portfolio, thereby reducing your risks. The Vanguard Total International Stock ETF (VXUS -2.03%) offers an excellent, low-cost way to obtain these valuable benefits.
The Vanguard Total International Stock ETF held shares in over 8,500 international companies as of the end of 2024. Global titans such as artificial intelligence (AI) chipmaker Taiwan Semiconductor Manufacturing, food and beverage titan Nestle, and weight loss drug leader Novo Nordisk stood among the ETF's top 10 positions as of Dec. 31.
By investing across a wide array of countries, Vanguard's ETF provides exposure to both developed and emerging markets. The fund could thus help you enjoy the relative safety and reliability of mature economies like the U.K. and Japan, as well as grant you access to the exciting expansion possibilities found in fast-growing markets like India and the United Arab Emirates.
Furthermore, the Vanguard Total International Stock ETF has one of the lowest expense ratios in its category. The fund's annual fee stands at just 0.05%, which amounts to $0.50 for each $1,000 invested per year. By keeping its operational costs low, Vanguard ensures that nearly all the ETF's gains will rightfully flow to its investors.
