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In the ever-changing world of investing, market volatility can be as constant as change itself. The swings can unnerve even the most seasoned investors, tempting them to make hasty decisions that may harm their long-term financial goals.
Many may be scared of the ongoing stock market volatility caused by higher rates, high inflation and geopolitics, but economic and corporate fundamentals do not seem to be a cause of concern. An 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
If you go by Warren Buffett, “the stock market is a device which transfers money from the impatient to the patient.” Hence, we highlight a few ETFs that can be invested and held in the current volatile market as these products are ageless and great long-term holdings.
The fund IVV tracks the performance of the S&P 500 index, which comprises 500 of the largest publicly traded companies in the United States. It offers exposure to blue-chip stocks across multiple sectors and has historically delivered competitive returns compared to other large-cap benchmarks.
There is no five-year period in history where the S&P failed to give gains, per the MarketWatch article. The index recently hit an all-time high. It is up 5.3% this year, gained 13.7% in the past two years and added 80.9% in the last five years.
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 1.37% annually (read: A Quick Guide to the 25 Cheapest ETFs).
Gold has traditionally been seen as a safe haven in times of financial uncertainty. The SPDR Gold Shares ETF offers investors an effective way to incorporate gold into their portfolio without the need to physically own the metal. GLD tracks the price of gold bullion, providing a hedge against inflation and currency devaluation. For investors looking to diversify their holdings and protect against systemic risks, GLD can be a golden choice.
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 and yields 2.65% annually.
Vanguard Total International Stock ETF (VXUS - Free Report) – Zacks Rank #3
The fund VXUS provides exposure to international developed and emerging market equities, offering diversification beyond U.S. borders. It includes stocks from countries worldwide, providing investors with access to global economic growth opportunities.
The underlying FTSE Global All Cap ex US Index is a market-capitalization weighted index representing the performance of around 5350 large, mid and small cap companies in 46 Developed and Emerging markets worldwide, excluding the USA. The fund charges 7 bps in fees and yields 3.26% annually.
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5 ETFs to Love Forever
In the ever-changing world of investing, market volatility can be as constant as change itself. The swings can unnerve even the most seasoned investors, tempting them to make hasty decisions that may harm their long-term financial goals.
Many may be scared of the ongoing stock market volatility caused by higher rates, high inflation and geopolitics, but economic and corporate fundamentals do not seem to be a cause of concern. An 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
If you go by Warren Buffett, “the stock market is a device which transfers money from the impatient to the patient.” Hence, we highlight a few ETFs that can be invested and held in the current volatile market as these products are ageless and great long-term holdings.
ETFs in Focus
iShares Core S&P 500 ETF (IVV - Free Report) – Zacks Rank #2 (Buy)
The fund IVV tracks the performance of the S&P 500 index, which comprises 500 of the largest publicly traded companies in the United States. It offers exposure to blue-chip stocks across multiple sectors and has historically delivered competitive returns compared to other large-cap benchmarks.
There is no five-year period in history where the S&P failed to give gains, per the MarketWatch article. The index recently hit an all-time high. It is up 5.3% this year, gained 13.7% in the past two years and added 80.9% in the last five years.
SPDR Portfolio S&P 1500 Composite Stock Market ETF (SPTM - Free Report) – Zacks Rank #2
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 1.37% annually (read: A Quick Guide to the 25 Cheapest ETFs).
SPDR Gold Shares (GLD - Free Report) – Zacks Rank #3 (Hold)
Gold has traditionally been seen as a safe haven in times of financial uncertainty. The SPDR Gold Shares ETF offers investors an effective way to incorporate gold into their portfolio without the need to physically own the metal. GLD tracks the price of gold bullion, providing a hedge against inflation and currency devaluation. For investors looking to diversify their holdings and protect against systemic risks, GLD can be a golden choice.
SPDR S&P Dividend ETF (SDY - Free Report) – Zacks Rank #2
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 and yields 2.65% annually.
Vanguard Total International Stock ETF (VXUS - Free Report) – Zacks Rank #3
The fund VXUS provides exposure to international developed and emerging market equities, offering diversification beyond U.S. borders. It includes stocks from countries worldwide, providing investors with access to global economic growth opportunities.
The underlying FTSE Global All Cap ex US Index is a market-capitalization weighted index representing the performance of around 5350 large, mid and small cap companies in 46 Developed and Emerging markets worldwide, excluding the USA. The fund charges 7 bps in fees and yields 3.26% annually.