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Many may be scared of the recent market slump on rising rate worries and geopolitics, but economic and corporate fundamentals do not seem to be a cause of concern. A recent article published on MarketWatch points out that for more than 100 years, stocks have almost doubled every eight years irrespective of geopolitical crisis, bubbles, credit defaults, pandemics, currency devaluations and inflation.
And there is no five-year period in history where the S&P failed to give gains, per the MarketWatch article. The S&P 500 is down 12.3% this year and gained a moderate 15.4% past year. But the index has gained 200% in the past five years. So, one doesn’t need to be restless now. If you go by Warren Buffett, “the stock market is a device which transfers money from the impatient to the patient.”
The S&P 500 has skidded about 7.3% this year due to sky-high inflation, the possibilities of faster Fed rate hikes, rising rate worries and escalating tensions between Russia and Ukraine. But still, you have some ETFs that can be invested and held in the current volatile market as these products are ageless and great long-term holdings.
The term “economic moat” was popularized by legendary investor Warren Buffett who said that he seeks "economic castles protected by unbreachable moats.” In simple words, a moat is a unique competitive advantage that allows a company to outperform others in the same industry over time.
The underlying Morningstar Wide Moat Focus Index of the ETF MOAT tracks the overall performance of the 20 most attractively priced companies with sustainable competitive advantages. No stock accounts for more than 2.98% of the ETF. IT charges 40 bps in fees (read: Can Buffett-Style Investing Succeed Today? Stocks & ETFs to Consider).
MOAT has gained 101.4% in the past five years compared with 90% gains in the S&P 500. MOAT (up 30.5%) has gained almost in the range of the S&P 500 (up 33%) in the past two years. However, MOAT is down only 3% this year, way less than the S&P 500.
This ETF is a winning combination of exposure to the key U.S. equity index and a low expense ratio. The ETF tracks the S&P 500 and charges only 3 bps in fees. Warren Buffett has long been a proponent of the index ETF investing as it offers a diversified approach. Buffett once suggested buying an S&P 500 low-cost index fund. “Keep buying it through thick and thin, and especially through thin,” he said. If history is any guide, the S&P 500 will bounce back soon (read: Warren Buffett Wins in 2022: ETF Lessons to Learn From).
Stocks that hike dividends continuously are safe bets. Over the last 90 years, dividends have accounted for more than 40% of the total return of the markets, per a research paper out from Morgan Stanley. From 1991 through 2015, non-dividend paying stocks earned only 4.18% returns per year while dividend-paying stocks significantly outperformed with a 9.7% average annual return, the paper highlighted.
Further dividend payments are expected to continue to increase in the coming months as most large U.S. companies are aflush with cash and in a position to increase payouts to their shareholders.
The underlying S&P High Yield Dividend Aristocrats Index measures the performance of the highest dividend-yielding S&P Composite 1500 Index constituents that have followed a managed-dividends policy of consistently increasing dividends every year for at least 20 consecutive years. SDY charges 35 bps in fees. Plus, SDY yields 2.72% annually, higher than the benchmark U.S. treasury yields. SDY is down only 3.5% this year.
Having an exposure to the overall stock market, irrespective of capitalization and style is an intriguing bet over the long term as it offers true diversification. Diversification is a way to win in an unstable market.
The underlying S&P Composite 1500 Index is designed to measure the performance of the broad market segment of the U.S. equity market. SPTM charges 3 bps in fees and yields 1.32% annually (read: A Quick Guide to the 25 Cheapest ETFs).
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Forget Fed & Geopolitics: 4 ETFs to Love Forever
Many may be scared of the recent market slump on rising rate worries and geopolitics, but economic and corporate fundamentals do not seem to be a cause of concern. A recent article published on MarketWatch points out that for more than 100 years, stocks have almost doubled every eight years irrespective of geopolitical crisis, bubbles, credit defaults, pandemics, currency devaluations and inflation.
And there is no five-year period in history where the S&P failed to give gains, per the MarketWatch article. The S&P 500 is down 12.3% this year and gained a moderate 15.4% past year. But the index has gained 200% in the past five years. So, one doesn’t need to be restless now. If you go by Warren Buffett, “the stock market is a device which transfers money from the impatient to the patient.”
The S&P 500 has skidded about 7.3% this year due to sky-high inflation, the possibilities of faster Fed rate hikes, rising rate worries and escalating tensions between Russia and Ukraine. But still, you have some ETFs that can be invested and held in the current volatile market as these products are ageless and great long-term holdings.
Below we highlight a few such ETFs.
VanEck Morningstar Wide Moat ETF (MOAT - Free Report)
The term “economic moat” was popularized by legendary investor Warren Buffett who said that he seeks "economic castles protected by unbreachable moats.” In simple words, a moat is a unique competitive advantage that allows a company to outperform others in the same industry over time.
The underlying Morningstar Wide Moat Focus Index of the ETF MOAT tracks the overall performance of the 20 most attractively priced companies with sustainable competitive advantages. No stock accounts for more than 2.98% of the ETF. IT charges 40 bps in fees (read: Can Buffett-Style Investing Succeed Today? Stocks & ETFs to Consider).
MOAT has gained 101.4% in the past five years compared with 90% gains in the S&P 500. MOAT (up 30.5%) has gained almost in the range of the S&P 500 (up 33%) in the past two years. However, MOAT is down only 3% this year, way less than the S&P 500.
Vanguard S&P 500 ETF (VOO - Free Report)
This ETF is a winning combination of exposure to the key U.S. equity index and a low expense ratio. The ETF tracks the S&P 500 and charges only 3 bps in fees. Warren Buffett has long been a proponent of the index ETF investing as it offers a diversified approach. Buffett once suggested buying an S&P 500 low-cost index fund. “Keep buying it through thick and thin, and especially through thin,” he said. If history is any guide, the S&P 500 will bounce back soon (read: Warren Buffett Wins in 2022: ETF Lessons to Learn From).
SPDR S&P Dividend ETF (SDY - Free Report)
Stocks that hike dividends continuously are safe bets. Over the last 90 years, dividends have accounted for more than 40% of the total return of the markets, per a research paper out from Morgan Stanley. From 1991 through 2015, non-dividend paying stocks earned only 4.18% returns per year while dividend-paying stocks significantly outperformed with a 9.7% average annual return, the paper highlighted.
Further dividend payments are expected to continue to increase in the coming months as most large U.S. companies are aflush with cash and in a position to increase payouts to their shareholders.
The underlying S&P High Yield Dividend Aristocrats Index measures the performance of the highest dividend-yielding S&P Composite 1500 Index constituents that have followed a managed-dividends policy of consistently increasing dividends every year for at least 20 consecutive years. SDY charges 35 bps in fees. Plus, SDY yields 2.72% annually, higher than the benchmark U.S. treasury yields. SDY is down only 3.5% this year.
SPDR Portfolio S&P 1500 Composite Stock Market ETF (SPTM - Free Report)
Having an exposure to the overall stock market, irrespective of capitalization and style is an intriguing bet over the long term as it offers true diversification. Diversification is a way to win in an unstable market.
The underlying S&P Composite 1500 Index is designed to measure the performance of the broad market segment of the U.S. equity market. SPTM charges 3 bps in fees and yields 1.32% annually (read: A Quick Guide to the 25 Cheapest ETFs).