Wall Street wants you to think you need to be a rocket scientist to make money in the stock market. But investing can actually be quite simple.
I previously rated VTI as a buy. But recent developments suggest to me that VTI is entering a consolidation phase, leading me to adjust my rating to HOLD. Recent technical trading patterns show no clear bias in its price movements.
The Vanguard Total Stock Market Index Fund ETF ( NYSEARCA:VTI ) dropped by more than 2% at the open and has been slowly regaining lost ground.
Creating a well-diversified portfolio through individual stock selection requires extensive research, constant monitoring, and significant time commitment. Many investors find themselves overwhelmed by the complexity of analyzing financial statements, understanding competitive advantages, and staying current with market developments.
VTI underperforms VOO, especially during market downturns, making VOO a superior choice for long-term investors seeking better returns and risk mitigation. VOO's higher allocation to the Magnificent Seven tech companies provides greater growth potential compared to VTI's broader market exposure. Historical performance shows VOO consistently outpacing VTI, reinforcing my preference for S&P 500 Index funds over total market funds.
This year has been an exceptional one for the markets as the S&P 500 has risen by around 27%. Many growth stocks are trading near or at their highs as well.
The Vanguard Total Stock Market Index Fund ETF offers broad US market exposure but is top-heavy, with the Magnificent Seven stocks comprising nearly 20% of the fund. Due to its concentration risk, VTI's performance closely mirrors the S&P 500, making it less effective for diversification. To mitigate risk, consider adding international and small-cap stocks through world indices or specific ETFs focusing on ex-US and ex-large cap stocks.
VTI is a comprehensive ETF covering all segments of the US market with a low expense ratio. Analyst ratings for VTI's top holdings (Apple, Nvidia, Microsoft) show rising Hold ratings and fewer Strong Buy ratings. FactSet's Q3 earnings report reveals below-average positive surprises and increased negative EPS guidance, while P/E ratios remain elevated compared to historical levels.
Time is on your side with these diverse exchange-traded funds.
VTI's dividend yield spread relative to VOO's is currently among the widest levels in 10 years. This indicates a much more favorable return/risk profile for VTI. VTI's broader market exposure includes mid and small-cap stocks, providing better growth potential and higher dividend yields than VOO.
The Vanguard Total Stock Market ETF (VTI) is among the most prominent exchange traded funds in the world, with more than $1.7 trillion in assets under management within this fund.
These three Vanguard ETFs are worth considering for the long term.