Historical data shows equity markets do well in election months at the index level and rally post-Fed rate cuts during expansions. Bonds also do well in cutting cycles, but underperform stocks without a recession. The Vanguard Total Stock Market ETF currently looks like a buy to me.
There are many different types of investors out there. Some prefer active management, choosing to pick individual stocks with the goal of beating the market and providing outsized returns over the long-term.
Data shows that the strategy of investing with broad diversification in America was not the most assertive. The valuations of large, mid and small cap companies are above the historical average. Therefore, despite mitigating specific risks, the VTI ETF will not mitigate market risk. A diligent analysis shows that a good allocation is composed of a diversification between American assets and global assets, which have a good risk-return ratio.
For investors seeking momentum, Vanguard Total Stock Market ETF VTI is probably on the radar. The fund just hit a 52-week high and is up 41.3% from its 52-week low price of $202.44/share.
24/7 Wall St. Insights Exchange-traded funds offer a stock market type platform to invest in various indexes.
Diversification is key in today's investing world. Exchange-traded funds, or ETFs, offer a convenient and affordable way to achieve this.
Timing the market is challenging; Vanguard Total Stock Market Index Fund ETF Shares offers exposure to small, mid, and large-cap stocks, making it a balanced choice for investors. The VTI ETF has over 3600 positions, is market-cap weighted, and heavily leans towards tech, reflecting the broader U.S. market. VTI's low fees (0.03%) and comprehensive market coverage make it a cost-effective and diversified investment option.
VTI has experienced a bearish trend, with a double-top pattern and key support levels at $251 and $244, amid seasonal and technical concerns. The Fed's potential rate-cutting cycle and upcoming US general election contribute to market volatility, impacting VTI's performance. Soft labor market data and mixed economic indicators have led to cautious sentiment, despite strong consumer spending and lower interest rates.
VTI is a core long-term holding due to its broad market exposure, low management fee, and suitability for dollar cost averaging. VTI tracks the CRSP U.S. Total Market Index, covering over 3,600 companies, with significant weighting in S&P 500 constituents. VTI's low expense ratio (0.03%) and diversified sector exposure make it a reliable choice for long-term equity portfolios.
Several key macroeconomic parameters have changed substantially in the past month. As a result, I see a much more attractive return/risk profile for VTI now than a month ago. VTI now is priced at a more reasonable FWD P/E due to the ongoing price corrections and Q2 earnings forecasts.
Investing in the stock market doesn't have to be a headache. This popular and comprehensive Vanguard fund should cover the bases for most retail investors.
US stocks have seen significant gains in 2024, with S&P 500 and Nasdaq 100 ETFs leading the way following a strong start to the second half. Small- and mid-cap equities have lagged behind, with S&P Mid-Cap 400 and Russell 2000 ETFs showing lower returns, but both funds soared last week. Despite positive price action, high valuations, investor sentiment, and economic growth uncertainties could pose risks for US stocks in the near future.