Investing never comes with any guarantees. However, some investment strategies and stocks have outperformed the rest. A significant benefit of investing, and the primary reason for doing so, is to ensure financial security in retirement. And for many people, this may involve having at least $1 million saved up. Fortunately, history has proven that a single investment and some time can get you well on your way.
If you want to retire as a millionaire, look no further than the Vanguard S&P 500 ETF. The Vanguard S&P 500 ETF (VOO) was introduced on September 9, 2010. It is an actively managed exchange-traded fund intended to provide broad exposure to the large-cap blend segment of the US equity market.
Vanguard is the fund’s sponsor. It has over $252.08 billion in assets, making it one of the largest ETFs. It is also attempting to replicate the large-cap blend segment of the US equity market.
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Is VOO an excellent long term investment?
The S&P 500 index tracks 500 of the biggest publicly traded American companies. It is widely regarded as a good indicator of the overall health of the US economic system. While not perfect, large-cap index funds that monitor the S&P 500 should be a part of every investor’s portfolio. Investing in the S&P 500 can gain exposure to top blue-chip stocks and immediate expansion.
The top ten holdings of the Vanguard S&P 500 ETF account for 29% of the fund and include companies such as Tesla and Johnson & Johnson. The top five areas are information technology, healthcare, consumer discretionary, financials, and communications networks, but the fund invests in any industry we can think of.
Uncertainty is the universal truth in the stock market. Exposure to various successful brands across all industries can help diversify our portfolio during difficult economic times and decrease some risks.
Even at $500 per month (equivalent to the $6,000 maximum IRA contribution limit for people under 50), we can almost reach $1 million while only contributing $180,000 individually. Increasing our monthly contributions by $50 will get us over $1 million in 30 years. We can be high-income earners to accomplish this. Someone earning less than six figures can contribute $600 monthly. They can likely attain millionaire status in 30 years if they invest 10% to 20% of their monthly salary.
What is the VOO average rate of return?
Expense ratios are an influential factor when calculating an ETF’s total return. Cheaper funds can surpass their more pricey counterparts in the long run if all other factors remain the same.
This ETF’s yearly operating expenses are 0.03%, making it one of the least expensive products in the space. It has a 1.67% one-year trailing dividend yield. Even though ETFs provide diversified exposure that reduces single-stock risk, it is still necessary to research a fund’s holdings before investing. Fortunately, most ETFs are high-transparency products that reveal their holdings daily.
This ETF has the highest allocation to the information technology sector, accounting for approximately 26.90% of the portfolio. Healthcare and finance round out the top three industries. Individual holdings show that Apple Inc. (AAPL) accounts for about 7.15% of total assets, followed by Microsoft Corp. (MSFT) and Amazon.com Inc. (AMZN).
The top ten holdings represent approximately 28.15 percent of the total assets under management. VOO aims to outperform the S&P 500 Index before fees and costs. The S&P 500 Index evaluates the performance of the US equity market’s large-capitalization sector.
The ETF has lost about -19.98% in 2022 and about -10.45% since last year (as of May 10, 2022). It has previously traded between $328.30 and $439.25. The ETF has a beta of 1 and a standard deviation of 24.60% for the trailing three-year period. Thus, it makes it a medium-risk option in space. It successfully diversifies company-specific risk with approximately 505 holdings.
Vanguard’s S&P 500 fund is an excellent long-term (1-year) investment. The Vanguard S&P 500 can be a financially attractive option for anyone looking for funds with a high return. As of 12/29/2022, Vanguard’s S&P 500 quote is 346.120 USD. According to the projections, a long-term increase is expected. The “VOO” fund list price for 2027-12-22 is 553.421 USD. Revenue is projected to be around +59.89% after a 5-year investment. In 2027, a current $100 investment could be worth up to $159.89.
VOO minimum investment
Apart from its index funds, Vanguard’s ETFs do not have a minimum investment amount. Other expenses are built into the fund’s processes even if we do not pay commissions to buy the stock. The annual operating costs of the VOO ETF are 0.03%.
VOO charges low fees, has a low expense ratio and requires no minimum contribution. This makes it more approachable to newer investors with less than $3,000 to invest in VFIAX. VOO had $760.1 billion in total assets and $256.4 billion in net assets as of June 2022, with 505 total holdings.
Apart from Vanguard mutual funds, Vanguard ETFs are not subject to strict minimum investment requirements. It is because their shares are traded and handled like any other stock. Although there is no minimum dollar amount for Vanguard ETFs, the cost of one share is the minimum deposit. One share of an ETF could cost as little as $50.2, based on the ETF chosen.
Vanguard’s VTIP ETF, which tracks short-term inflation-protected securities, had a share price of $49.99 as of August 19, 2022. Meanwhile, VOO, Vanguard’s ETF that tracks the S&P 500, was trading at $388.174 per share.
For another example, the minimum purchase in VTI, one of Vanguard’s most popular ETFs that track the US stock market overall, was $211.79.5 per share.
Vanguard provides many ETFs with many investment aims and very low expense ratios. Vanguard ETFs are well-known for their low turnover ratios, tracking errors, and expense ratios due to their better investment sample selection. The Vanguard average ETF expense ratio is around 0.06%, considerably lower than the industry average of 0.24%.
Is VOO stock a good buy?
VOO could be a good investment for investors looking to diversify their portfolios without buying individual stocks in the S&P 500 index. VOO had a median market cap of US$193.6 billion in March 2022 and a 5-year earnings growth rate of 20.4%.
VOO is an excellent low-cost ETF that can benefit newbies and experienced investors. It has a 0.03% expense ratio, likely reducing our returns and long-term performance. It has a track record of success.
One of the most important things we can do when making investments is to maintain consistency and discipline. Millionaires are rarely created overnight; they are typically created through the application of time and investment returns. Short-term results will vary, but we should believe that the Vanguard S&P 500 ETF(VOO) will lead us to a glorious future in the long run. The most important thing we can do is stay consistent and let time work.