Today I will analyze one of my favorite investment funds
It is The Total Stock Market Index Fund
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Investment funds
also known as a mutual fund, index fund, and ETF
are packages that contain stocks of many different companies
Mutual funds will have higher management fees than index funds and ETFs
I was a video that clearly explained the difference between mutual funds, index funds, and ETFs
I will leave the link here
You can click on it to learn more about them
There are many different investment packages on the market today
But the package I want to talk about today is Vanguard Total Stock Market
The symbol is VTSAX
This package is managed by Vanguard
But other investment firms will have similar packages as well
For example, Fidelity has the Fidelity Total Stock Market
The symbol is FZROX
These 2 funds are very similar
They are just being managed by two different companies
Vanguard Total Stock Market was established in 1992
This bundle is designed to provide investors with exposure to the entire US stock market
When investing in this package
That means you invest in the whole US market
Because this package contains stocks of more than 3000 different large and small companies
including Apple, Microsoft, Amazon, and Tesla
Visa, Facebook, Johnson & Johnson
and lots of different big and small companies
The great thing about this package
is how they will distribute the invested money properly
And we don't have to think about which stocks to buy
Which stocks to sell, at what time
because they did it all for us
Currently, $938 billion is being invested in this package
VTSAX is a fund that is invested in the US market
so when you invest in this fund
Your investment will be distributed into many different sectors
2% will be invested in basic materials
16.4% will be invested in consumer discretionary
5.6% will be invested in consumer staples
2% will be invested in the energy
9.8% will be invested in financials
14.2% will be invested in health care
13.4% will be invested in industrials
3.5% will be invested in real estate
26.4% will be invested in technology
3.5% will be invested in telecommunications
3.2% will be invested in utilities
If you invest $10,000 in VTSAX
$200 will be invested in basic materials
$1640 will be invested in the consumer discretionary
$560 will be invested in consumer staples
$200 will be invested in the energy
$980 will be invested in financials
$1420 will be invested in health care
$1340 will be invested in industrials
$350 will be invested in real estate
$2640 will be invested in technology
$350 will be invested in telecommunications
$320 will be invested in utilities
You can see that
The investment is evenly distributed to different sectors to ensure diversity
And the great thing about this package is that we don't need to do anything
they will automatically allocate them
This is one of the most diversified investment package on the market today
Also because this package contains many stocks of many different companies in the U.S.
and is very diverse
so in my opinion, this fund is one of the least risky fund
The possibility that we will lose all of the capital when investing in this package is almost 0
Just think about it, we invest in the US market
We only lost money when the entire US market collapsed completely
Of course, the market will have good years and bad years
But if investing long-term
the market will rebound eventually
In my opinion,
When investing in this package,
you will lose all of your money if it's the end of the world
This year, the VTSAX profits of about 15%.
Within 3 years, the average annual profit is about 12%
Within 5 years, the average annual profit is about 14%
Within 10 years, the average annual profit is about 13%
And since the day this package was established, each year an average of about 7% profit.
This is the reason why every time I do the compound interest example, I use 7%.
If you invested $10,000 in this package in 2010
you have about $35,000 today
You can see it in this graph
the market has year up, year down
But in the long run, it is always going upwards
For those who are just starting out and do not know which company is suitable for your investment
Total Stock Market Index Fund is a pretty ideal choice
Please note,
I'm just analyzing these investment packages
so that you can access to these information easily
This index fund might not be suitable for everyone
because everyone circumstances and risk tolerance are different
You should always do your own research before starting to invest
In this VTSAX package
Expense ratio is 0.04%
That means for every $10,000 you invest
Then each year you have to pay $4 management fee
Minimum investment is $3000
That means you must have at least $3000 to invest in this package
If you do not have enough $3000 and you want to start investing
you can buy an ETF instead of an index fund
then you can click here
Total Stock Market ETF ticker is VTI
Expense ratio is 0.03%
The current price of this package is $176/share
If you don't have enough $3000 to buy the other package
then you can start buying each share of this package
Please note,
Index funds are sold in bundles
You can buy a package of $3000, $4000, $5000, $6000, ect.
You cannot set the limit how much you any to pay for a share
when you place orders to buy index funds
The transaction will be completed at the end of the day
and the price of the share will be charged on average
As for ETFs, you can buy by share
You can buy 1 share, 2 shares, 3 shares, etc.
and trading ETFs is like trading stocks
You can set a limit on how much you want to buy 1 share
and you can buy it several times a day
I have made a video to clarify the difference in index funds and ETFs
I will leave the link here if you want to learn more
Also if you have an account with Fidelity, and you want to buy the Fidelity Total Stock Market package
Its symbol is FZROX
The great thing about this package is that it has no expense ratio
That means you do not have to pay management fees when you invest in this package
And the second great thing is that you don't need to have at least $3,000 or $5,000 to invest
There is no minimum investment
You can start investing in this fund with as little as $1.
VTSAX is a package that I bought when I first started investing
I keep it until now, and I have no intention of selling
Many of you asked me this question:
"Sis, the price is high now, should I sell it to make a profit, then wait when it drops and then buy it again?"
Really ... If I answer this question, I'd be rich already
No one can predict the market. No one knows when it goes up, when it's down
Time in the market beats timing the market.
For me, when I invest, I only buy and buy more, but I don't sell
I just sell stocks when I don't like that company anymore, and I don't want to invest in it anymore
Do you guys like these type of videos?
I am planning to do a series analyzing different investment funds
in order to make the information more accessible for you guys
Please let me know in the comment below
I post videos every Friday, at 3P.M PST
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Thank you for watching. Bye.