One of the safest ways to invest into the markets is by buying exchange-traded funds (ETFs). They offer minimal risk to investors because you’re holding a basket of stocks that gives you much more safety and diversification than if you were to pick stocks individually. And in some cases, those baskets can be quite large, making any company-specific risk almost negligible.
A great option for investors looking for a broad mix is the Vanguard Total Stock Market Index ETF Shares (NYSEArca:VTI). As its name suggests, this ETF aims to give you exposure to the total market.
With more than 3,500 stocks in the fund, there’s not a whole lot of risk you’ll have to an individual stock. The top two stocks in the fund are Apple Inc (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT). Those two tech giants account for just under 11% of the entire portfolio weight. Its top 10 holdings only make up 25.2% of its total assets.
The ETF has broad exposure across different sectors with 27.8% of its holdings in technology, followed by 15.5% in financials, 14.7% in consumer services, 13.4% in health-care, and industrials at 11.7% round out the top five.
Year to date, the ETF’s risen 2% in value, a bit better than the Dow Jones, which has fallen by 5%. However, it’s underperformed the NASDAQ, which is up over 21% thus far in 2020.
But with a minimal expense ratio of just 0.03%, this is a cheap ETF that you can hold in your portfolio that you can absolutely buy and forget about over the long term that can give you some great diversification.
