Investing doesn't need to be hard. Just a couple of well-chosen exchange-traded funds (ETFs) can make it easy -- and lucrative.
Read on to learn about two great ETFs that can help you safely profit from the growth of the global economy and instantly diversify your portfolio with exposure to thousands of stocks.
This stalwart ETF can be the foundation of your investment portfolio
The Vanguard Total Stock Market ETF(NYSEMKT: VTI) is an excellent and relatively low-risk way to invest in U.S. stocks. This well-diversified ETF holds positions in more than 3,700 large-, mid-, and small-cap companies. Industry giants like Microsoft, Apple, and Nvidia are among the fund's largest holdings.
Crucially, the Vanguard Total Stock Market ETF sports a low expense ratio of just 0.03%. That amounts to about $3 per year in expenses for every $10,000 invested in the fund. By charging these small fees to cover its relatively low operating expenses, Vanguard can pass nearly all the ETF's returns on to its shareholders. And those gains can create vast wealth over time.
There's more than one way to buy the ETF. You could invest a lump sum today, and you'll likely do just fine over the long term. Or you could buy regular amounts of the fund on a schedule that works well for you (perhaps monthly). This proven strategy is called dollar-cost averaging, and it can help to take the stress out of trying to decide when to buy. It can also reduce your risks by spreading out your purchases over time.
All told, the Vanguard Total Stock Market ETF offers you a simple way to invest in the U.S. economy. That's a smart wager to make, for as legendary investor Warren Buffett says, "Never bet against America."
This international ETF could add another powerful growth element to your portfolio
Investors who would like even more growth and diversification should consider an international fund. One excellent option is the Vanguard Total International Stock ETF(NASDAQ: VXUS), which could further lessen your risks while increasing your potential for gains when combined with a U.S. stock ETF.
This fund gives its shareholders exposure to over 8,600 stocks of companies located outside the U.S. These international businesses are growing their earnings by roughly 13% on average. Notable holdings include artificial intelligence (AI) chipmaker Taiwan Semiconductor Manufacturing and Danish healthcare titan Novo Nordisk.
Developed markets like Japan, the United Kingdom, Canada, and France account for about 75% of the fund's investments. Rapidly expanding emerging markets like Mexico and Saudi Arabia comprise the remaining 25% of its portfolio. The Vanguard Total International Stock ETF thus offers you a clever combination of economic strength and long-term growth.
Better still, the Vanguard Total International Stock ETF has a low expense ratio of just 0.08%. That's a greater than 90% discount to the average fees charged by comparable international funds.
Together, the Vanguard Total Stock Market ETF and the Vanguard Total International Stock ETF can form the bedrock of your long-term investment portfolio. Owning both could give you a simple and low-cost way to profit from the performance of thousands of stocks across the world.
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Microsoft, Nvidia, Taiwan Semiconductor Manufacturing, Vanguard Index Funds-Vanguard Total Stock Market ETF, and Vanguard Star Funds-Vanguard Total International Stock ETF. The Motley Fool recommends Novo Nordisk and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
