Stock market investments can help you develop lifetime wealth, but choosing the correct ones can increase returns while minimizing risk. If you desire a low-maintenance investment, ETFs may be a good choice. ETFs are a basket of securities, so investing in one share gives you a stake in dozens or hundreds of stocks.
Growth ETFs aim to outperform the market. This form of investment could yield higher returns than an S&P 500 ETF because it holds stocks with above-average returns. There are many ETFs, each having pros and cons. One popular alternative is the Vanguard Growth ETF (NYSEMKT: VUG), which could turn $200 every month into $820,000 or more. The method.
Reasons to buy Vanguard Growth ETF 208 equities in the Vanguard Growth ETF might outperform. Its low expense ratio of 0.04% means you'll pay $4 per year for every $10,000 in your account. This ETF has much lower costs than others, saving you thousands over time.
Another benefit of this ETF is that its stock mix balances risk and return. Amazon, Apple, Microsoft, and Visa are among the fund's top 10 holdings, which make almost half of its total.
Dozens of smaller stocks with lots of promise make up the remaining half of the fund. Smaller companies are more risky and volatile, but they also expand faster. If one of these stocks becomes a superstar, you might make big money.
This mix of powerhouse stocks and emerging companies can boost earnings while minimizing risk. You'll still face short-term volatility, but with half the fund in larger, more stable equities, your investment may grow over time.
Making hundreds of thousand dollars It's impossible to predict the future performance of any investment, but growth ETFs are especially unpredictable. However, prior performance of this ETF can be helpful.
The Vanguard Growth ETF has returned 14.74% annually for the past decade. Your investment may not produce those returns in the future. You'll need to invest regularly for 35 years at 11%, somewhat more than the market's historical average of 10%, to save $820,000. You may earn even more if this ETF continues producing returns like the past decade.
Understand the dangers before buying this type of investment. This ETF has historically generated above-average returns, but that doesn't ensure it will continue.
Growth ETFs are more volatile than broad-market products like S&P 500 ETFs in the short term. While designed to beat the market over time, dramatic ups and downs during volatility can be difficult to stomach. Be prepared to weather market downturns if you buy this ETF.
For low-effort, high-reward investments, the Vanguard Growth ETF is a great choice. While there are no assurances in the stock market, investing regularly and thinking long-term could lead to higher earnings.
follow for more updates