Hi guys, it's Mark.
So if you ever wished there was an easy way to become rich
that anyone could do with no prior experience.
Well, guess what there is, and I've made millions
doing it myself, but before you click off
thinking this is some kind of scam,
I'm not pumping the latest crypto coin or trying to sell you
an online course that costs $997,
I'm instead referring to index funds.
Index fund investing is super easy, incredibly effective,
and in most cases actually ends up beating the profits
of professional investors.
A study published in 2020 showed over 15 year period,
nearly 90% of actively managed investment funds
failed to beat the market.
Simply put experts who spend a full-time job,
trying to beat the market are unable to beat most investors
that use the index funds strategy.
So today let's discuss what an index fund actually is,
which ones are best for you and how you can use them
to grow your wealth, right after you smash that like button
for the LTube Ugarhythm.
I'm gonna be honest, I almost didn't make this video.
The world has changed over the last couple of years,
and now most people only seem interested in the stocks
and crypto going to the moon, I get it.
It's exciting to see your money multiplied quickly,
but the harsh truth is lots of people who invest
in more than I can afford to lose him risky investments.
This means that when a crash happens and believe me,
it always does, many people will be left with nothing.
I've seen this happen time and time again.
And the people that make it through the storm
are usually the ones that also invest for the long term.
Of course, I've taken my fair share of risks over the years,
like investing in a dot-com bubble and now by investing
in the metaverse.
However, the one thing I've kept consistent
is my index fund invested.
No matter of the market is up or down every week
I prioritize those investments.
This is allowing me to grow my wealth over the longterm.
When a lot of my previously richer friends
have lost everything.
So I like to think of index funds as my secret weapon,
as they've meant that I've always had a backup
for when the worst happens.
If you only ever watch one of my videos all the way through
to the end, and it definitely should be this one.
So it's been a while since I've talked about index funds.
So let's break down what they actually are.
(Skittles chink)
Think of these Skittles as lots of different individual
companies, this one is Tesla, this one is Apple,
and this one is Coca-Cola.
Now as an investor, you could cherry pick the ones
that you liked the most.
This is called investing in individual stocks.
However, these companies go bankrupt or crashing value
you're in trouble, mind you, I do like the new sour
Skittles, they're very tasty.
The great thing about index funds is with one simple
purchase, you can own all the Skittles in the bowl
without having to deal with all the hassle
of creating your own hand selected portfolio,
or have some expensive managers do it for you.
This is because they're passively managed,
which means they are extremely cost-effective.
I have a large chunk of my wealth in index funds,
and I dabble with individual stocks using my fund money.
This is because occasionally enjoyed excitement of CNN
investments skyrocket 40% in a day, which let me tell you,
it's never gonna happen with an index fund,
but that's not a bad thing as it's all about building
long-term wealth and not short term wins.
The truth is that if a stock or crypto can give you
these kinds of returns, then it could also swing back
the other way.
The great thing about index funds is if one company
from within the bowl is having a bad time,
like this one, boom,
you've still got all the other companies holding it up.
An index fund, aims to track something called an index,
which is a lot like a sports leaderboard.
They can rank company size, location, business type,
and even currencies.
So because there are so many choices,
let's pretend we're in a supermarket,
and I'll walk you through my 3.5 favorite baskets of stocks
to invest in, the reason I've added a 0.5
is because there's a new kid on the block.
Remember I'm a businessman and not a financial advisor.
These are just investments I believe in.
And none of this should be taken as financial advice.
I'm just aiming to make you aware of these investments.
So please do your own research before investing.
Basket number one is of course the S&P 500 Index.
This is the big daddy of index funds,
and you've probably heard people talking about it before.
I've certainly mentioned it hundreds of times,
but there's a good reason for this as it is such a great
investment, and it's done very well for me over the years.
On average, the S&P 500 has returned investors eight to 10%
per year, which isn't anything crazy compared to the latest,
crazy like Shiba Inu, but it is pretty consistent,
a much less volatile.
That sounds great, but what's inside the basket?
Well, the S&P 500 is a top 500 American companies.
Well, actually it's 505 stocks to be exact,
in order to be included in the S&P 500,
a company must meet certain requirements,
include in achieving a specific market cap,
having the majority of its shares in public hands,
and being a public company for at least a year.
So if you buy one share of the S&P 500,
you will actually own a small piece of Amazon, Tesla, Apple,
PayPal, and so much more.
The ultimate flex is telling your friends,
you own all of these companies.
One of the benefits of the S&P 500 is that it's widely
spread across many great companies in the USA.
To be honest, they are more like worldwide companies now,
since the creation of the internet has a blurred the lines
between borders made the world
much, much more interconnected.
The historical return of eight to 10% is allowing me
to generate a fortune over the years due to the power
of compound interest.
However, it's worth pointing out that the S&P 500
is a bit tech heavy these days with five big tech stock
dominating 23% of the entire fund.
It's up to you if you see this as a positive or a negative,
I personally don't mind us tech is doing really well,
and I do believe it's the future,
but there are so many different index funds.
So track the S&P 500, which one do I pick?
Well, that depends on where you live in the world,
and what investing platform you're using.
The best I found in the USA, the VFIAX index fund,
or the VOO ETF, the best in the UK would probably be
the VUSI ETF, but there are tons of other ETFs
that also track the S&P 500.
One thing I look out for is that the dividends
are reinvested into the fund.
The only real difference between an index fund and an ETF,
otherwise known as an exchange traded fund
is that these can be purchased or sold at any time
throughout the day, just like a stock,
as long as the market is open of course,
that's why they're exchange traded, it's in the name.
Index funds can only be purchased in full once per day.
So, for example, if the price of the fund is $500,
you must pay $500.
Whereas an ETF can also be purchased in fractional shares,
which means you don't have to buy a full share,
and can instead invest whatever amount you like.
This is great if you're just starting out,
or you want a dollar cost averaging,
I do this by making a stand in order each week.
And I don't even know it's come from my bank account,
really and truly there isn't a huge difference
between an index fund and an ETF.
So just consider which one is best for you
and take the plunge.
If you want to get started in Public giving away a free
stock worth all the way up to a $1000s If you live in a USA
and Free Trader giving you a free stock
worth all the way up to 200 pound, if you live in the UK,
I'll leave those links below.
Basket number two is a total stock market index.
The total stock market index is, well,
the definition of diversification,
you can't really get any more skin in the game
for a lower cost than this.
So if you want to invest for a long period of time
without having to check or even think about it,
then this is most likely to fund for you.
Investing in everything means you can experience gains
across the entire market.
And unless a crazy crash happens, you should be okay.
But even if it does crash, with time things bounce back.
I've seen three crashes since I've been an investor,
the dot-com bubble, the 2008 financial crisis
and the 2020 COVID crash.
I'm not gonna pretend these crashes didn't hurt,
but longterm, every market I've invested in
has bounced back.
But downside to this index is that it depends on the entire
market trending upwards.
This means that there could be an individual stock
that you really believe in that goes all the way
to the moon, but you might not experience those gains
because that one stock doesn't play much of a role
within the index fund.
If you're an active investor who likes to try
to mess with options, this index fund is probably great
to have as a safety net that you regularly invest into.
The best I've found in the USA is the VTSAX index fund,
and the VTI ETF and the best in the UK is the VWRL ETF.
These are Vanguard index funds,
but you should be able to buy them on most platforms,
including public and free trade.
The third basket is the emerging markets index.
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 to have at least a little bit
of exposure to these markets.
It's all well, good buying the S&P 500,
but when China or another emerging country
has some great gains, you'll end up missing out.
I'm definitely more excited about funds like the S&P 500,
but as I also do a lot of business in China,
I see firsthand why invest in emerging markets
is a good idea.
Just as an example of this growth.
When I first traveled to China,
I looked into buying an apartment in Shen Zen.
This real estate was $47,000,
and is now worth over a million.
This just shows the potential growth in these markets.
Emerging market funds are definitely the most risky
type of index fund we've discussed so far.
These funds include stocks from lots of different growing
markets and can be very heavy with Chinese companies,
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 to me to throw a little bit of money
in for diversification.
Also, the population of these emerging markets
is absolutely huge.
So I think there's certainly potential for growth,
not only in their own countries, but in exports as well.
As I said before, these are definitely more risky plays,
but countries are adapting and evolving.
So I do like to invest in their future.
The best I've found in the USA is a VEIEX.
That's a mouthful ETF, and in the UK, the VFEM ETF.
They don't make it any easier there, do they?
Basket number 3.5 is a bit of a bonus one
as it's the metaverse index,
recently, I've made a few videos on the metaverse
and you guys seem super excited about it,
which is great because I am too.
I actually rewatched the film "Ready Player One"
the other day.
And if you ever want to see the possibilities
of the metaverse, then I recommend watching this movie.
This has just made me even more confident
that the potential profit is insane.
And therefore, it's not something that I can ignore,
because of this, I've been investing more and more
into companies that I think will be heavily involved
in the metaverse.
And I'm not just talking about META.
If you want to see my other picks,
I made a video about it a few weeks ago.
It's just here, I've just been picking my favorite stocks
and building my own portfolio,
but Roundhill Investments are offering a META ETF.
This makes things easier is it offers exposure
to lots of companies that are set to benefit,
and take part in the metaverse all with one simple bite.
But of course the metaverse isn't here yet.
And it's all just speculation at the moment.
Also the top 10 companies in this ETF are not all selections
I would make.
So that's definitely something to look out for and consider,
this ETF also has quite a high expense ratio
of 0.75%, which may not sound a lot, but trust me,
it's considerably more than a lot of the funds
I've already talked about.
I think the best way forward is to look at what stocks
the META ETF holds,
and then buy the ones you like individually.
But if this sounds like too much hassle,
then ETF is definitely something to consider.
When I first heard about index funds,
I thought it was fantastic.
'Cause before I'd always thought investing
was only for the rich,
the most important thing is getting started.
And index funds gave me the ability to start investing
when I knew very little, which meant that I could get
the snowball rolling.
So if you're sitting on the fence,
then now is as good a time as ever
to start your long-term investing journey.
So I'm gonna leave the next video right up there,
but don't click on it just yet.
Make sure to subscribe if you want to grow your wealth.
And don't forget to pick up the free stocks and Bitcoin
with the links below, okay?
I'll see you over there. (clicks)