I make $17,000 per week mostly from this little thing
called index fund investing, and I'm not the only one.
- You need to know what's going on
when it comes to index fund investing.
Think of it like a basket of stocks.
- This is the simplest way to build wealth
for probably 99% of investors.
- If you aren't investing,
you are literally costing yourselves thousands,
if not tens of thousands of dollars.
- But how do you know which index funds
to invest in when there are so many to choose from?
Well, these are my favorite seven,
and coming in at number seven
is the iShares Automation and Robotics ETF.
AI is the biggest thing to happen
to the world since the internet.
It's got the whole creative industry scared
and it's only gonna get bigger.
As investors, this is very exciting.
As with funds like this one, we can hopefully benefit
from that boom together.
Look, I'm not a financial advisor,
and of course, there's no guarantees.
I'm just somebody that's been there and done it before
with the dawn of the internet,
and I'm noticing the same signs again.
I mean, I was at a convention in Texas the other week,
and all everyone kept banging on about
was AI this and AI that.
On top of this, I also manufacture products
all over the world, and during the last couple of years,
the advancements in robotics
has offered huge cost savings to my companies.
To be specific, the industry's forecast
to have a compound annual growth rate of 14.7%
for the next 10 years.
Interest in AI stocks also surged at the start of 2023,
especially given the rise of chatGPT.
Now for the specifics,
the index funds tracks 157 companies
in robotics, automation, and artificial intelligence.
Its expense ratio is nought 0.4%.
That means every $10,000 invested cost $40 annually
and expense ratio is how much the ETF charges annually
for portfolio management and other admin costs.
Here are some similar options
if this fund isn't available in your region.
AI might be popular right now,
but it's nowhere near as famous as number six,
the Vanguard S&P 500 ETF.
This is the index fund you hear me bang on about
all the time, as it allows you
to invest in the 505 biggest public companies in the USA
with a single click.
This means that if you haven't invested
in any index funds before,
then this is the perfect starting point
as it allows you to invest in all the major sectors
of the economy.
You'll have all the big dogs covered with this one
from tech to consumer goods, these 505 companies have it all
and actually are collectively worth about 80%
of the US stocks total value.
The Vanguard S&P 500 ETF is about the cheapest you'll find.
Its expense ratio is nought point nought 7%,
meaning you'd annually pay just 70 cents
for every $1,000 you invest.
Because the investment fee is so low,
your returns are virtually identical to the performance
of the S&P 500, which has year-to-date returned 9%.
There's also no minimum investment amount,
so you can start investing with as little as $1.
Here are some similar options
if this fund isn't available in your region.
The Vanguard S&P 500 is great,
but it does have one major issue
that number five tries to address.
This is the Invesco S&P 500 Equal Weight ETF.
You see, remember before I mentioned
that the Vanguard S&P 500 was made up
of 505 different companies?
Well, these companies aren't invested in equally,
meaning if you imagine them like apples in a basket,
some are a lot bigger than others.
In fact, some are the size of giant pumpkins in comparison.
The magnificent seven companies, which include Alphabet,
Apple, Amazon, Meta, Microsoft, Nvidia, and Tesla
brought in an average return of 92%.
This just shows that most of the growth was actually due
to these companies and not the other 498.
You may think this is great news,
but their dominance may also be a sign
that the current ball run isn't as sustainable as it looks.
The Invesco S&P 500 Equal Weight ETF invests
in the same 505 stocks, but weights all the stocks equally.
So each one is around nought 0.2% of the fund,
meaning all your apples are the same size.
I don't currently have a lot of money invested in this fund,
but I'm keeping an eye on those magnificent seven stocks
as they're getting a little bit too powerful for my liking.
Here are some similar options
if this fund isn't available in your region.
But if you want a less bumpy ride,
then number four could be your best bet.
The SPDR S&P Dividend ETF.
All of these titles are a bit of a mouthful,
but don't worry, I'll list them all in the description
so you don't have to remember them all right now.
The companies we've been talking about so far
have been all about growth,
but that's not the only way to invest.
Lots of people want an easier life,
investing in less volatile stocks
that instead pay a predictable dividend every quarter.
This is like a cash reward.
Investors are paid for holding the stock.
The SPDR S&P Dividend ETF tracks 121
of the stocks in the S&P composite 1500 index
with the highest dividend payouts.
All the companies owned by the ETF
have increased their dividend payouts annually
for the last 25 consecutive years.
Look, I'm gonna be upfront with you.
Because these companies are paying a dividend,
it does mean they're gonna be less exciting,
a bit boring, if you like.
If they were looking to grow, then they would take that cash
and put it back into their businesses.
That's why there are very few tech stocks in this fund
as they don't tend to pay generous dividends.
Here are some similar options
if this fund isn't available in your region.
Whoa, whoa, whoa, slow down, Mark.
I don't even know how to invest in any of these funds.
Can you give me a guide of what to look for
in an investing platform?
The first thing is that the platform you choose is regulated
by a respected body like the Financial Conduct Authority.
These have different names depending on where you live.
If you're in the UK,
then you can check out if a platform has this regulation
on the FCA website.
Another vital feature to look for is accessibility.
An excellent platform should be user-friendly
and offer an easy to use interface,
making it suitable for traders of all levels.
I mean, you shouldn't need a degree in finance
to navigate your investments.
I know I haven't.
You also wanna make sure you find a platform
that offers zero-commission investing.
This means you can invest without worrying
about extra fees eating into your profits.
This is a game-changer.
I've personally been using XTB
to invest in all these index funds.
It excels in all the aspects I've just discussed,
including zero commission stocks, a user-friendly platform,
robust educational resources, and is regulated by the FCA.
Full disclosure, they do sponsor me.
However, my experience has been outstanding,
so if you wanna give it a go,
then I'll leave a link in the description below
so you can invest in both stocks and ETFs commission-free.
Number three holds a special place in my portfolio
as it allows me to invest in smaller companies.
It's called the SPDR Russell 2000 U.S. Small Cap ETF.
But why would you want to invest in smaller companies?
Well, there are two main reasons.
The first is their growth potential.
It's much higher than larger businesses.
Think of it this way.
It'd be far more difficult for Tesla to double in size
than it would be for a newer tech company
with a $500 million market cap.
So while their price swings tend to be a bit more dramatic,
small cap stocks tend to outperform large caps
over long periods.
The second is diversification.
This ETF contains 2000 different companies
and is far less dependent on a handful of big stocks
like the S&P 500.
But what if a company grows too big
and it's no longer classed as a small cap?
Very good question.
It's readjusted every year to make sure that doesn't happen.
As a real world example, in the 2021 readjustment,
GameStop was removed from a Russell 2000
after its price soared in the meme stock craze.
As of making this video,
the index fund's largest concentrations
are in industrials, healthcare, and financials.
The fund's expense ratio is nought 0.3%,
which is relatively low, especially for one
that offers exposure to the companies
with the most potential growth.
Here are some similar options
if this fund isn't available in your region.
But number two has even more potential.
The Xtrackers MSCI Emerging Markets ETF.
Emerging markets are predicted by some experts
to be on the rise, and whether I agree with this or not,
I think it's important for me
to have a little bit of skin in the game.
It's all well and good buying the S&P 500,
but then what about if China
or another emerging country has some great gains?
You've just missed out.
That's why diversification is so important.
This is definitely the most risky index fund
that we've discussed, but in moderation,
I think they can be great.
Taking a look at the list
of the largest economies in the world, a lot
of them are emerging markets, so it just makes sense for me
to throw a little bit of money in for diversification.
Considering that about 85%
of the world's population lives in developing countries,
investors with a long-term focus who are comfortable
with volatility may want to seriously consider investing
in this fund.
It had holdings in countries such as China,
India, Taiwan, Brazil, and Saudi Arabia, amongst others,
with a total of 1,437 different stocks.
Plus, the good news is that it comes
with a low expense ratio of just nought point 18%.
Here are some similar options
if this fund isn't available in your region.
But number one on my list is even more exciting.
The iShares NASDAQ 100 UCITS.
This ETF aims to track the performance of the largest,
non-financial companies in the NASDAQ 100 Index.
I owe a lot of my success down to technology.
My businesses produce state-of-the-art radio control models
in factories all over the world,
and my investments have been pretty tech heavy.
Apart from big names like Apple, Google, and Amazon,
the NASDAQ 100 also features companies like Meta Platforms,
formerly known as Facebook,
and Starbucks who make overpriced coffees.
If you see now much a Java Chip Mocha Frappuccino costs,
I could buy a house for that.
In simple terms,
the NASDAQ 100 includes almost all the famous
and forward-thinking companies known worldwide.
So far, this ETF hasn't let me down,
with a year-to-date return of 35%.
The expense ratio is also only nought 0.33%.
That means for every $10,000 invested,
it costs $33 annually.
If you believe in these companies,
then it might be worth investing in this ETF
as it's an easy way to buy all of them at the same time.
If you wanna know seven passive income ideas I use
to make $67,000 per week,
then I'm gonna leave that video right up there,
but don't click on it just yet.
Make sure to subscribe if you want to grow your wealth.
Okay, I'll see you over there.