These are particularly uncertain times, with tariffs, threats of tariffs, potentially rising inflation, and all. If you're wondering how to invest in such an environment, here are some suggestions.
First, don't put any money you'll need within five, if not 10, years into stocks because anything can happen in the relatively short term. You don't want to need to sell stocks after they've crashed to raise money for a college tuition bill, for example.
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With your long-term money, consider exchange-traded funds (ETFs), which are funds that trade like stocks. Many ETFs track indexes, making them cost-effective investment options. I offer 10 suggestions below, all from Vanguard, largely because Vanguard is known for low fees, and fees can make quite a difference in your investment results.
Any of these funds could be one of the smartest investments you make. Choosing between them will depend on your goals and risk tolerance, among other considerations.
I've sorted the ETFs below into a few main groups: The first three are broad index funds, the next two are dividend-focused ETFs, followed by a value-oriented ETF, and a handful of growth-seeking ETFs. This first table lists their expense ratios (annual fees) and their dividend yields.
An expense ratio of 0.10% means you'll be charged about $10 annually for each $10,000 you have invested in the fund. Each of these ETFs sport ultra-low fees. A dividend yield of, say, 1% means you can expect to collect about 1% of the value of your investment annually. So with a $10,000 investment, you'll likely receive about $100 in dividends. Healthy, growing dividend payers tend to increase their payouts, often annually. So a $100 in total dividends today may end up being $300, and perhaps $500, in dividends in future years.
ETF |
Expense Ratio |
Dividend Yield |
---|---|---|
Vanguard S&P 500 ETF (NYSEMKT: VOO) |
0.03% |
1.21% |
Vanguard Total Stock Market ETF (NYSEMKT: VTI) |
0.03% |
1.19% |
Vanguard Total World Stock ETF (NYSEMKT: VT) |
0.06% |
1.90% |
Vanguard Dividend Appreciation ETF (NYSEMKT: VIG) |
0.05% |
1.66% |
Vanguard High Dividend Yield ETF (NYSEMKT: VYM) |
0.06% |
2.53% |
Vanguard Value ETF (NYSEMKT: VTV) |
0.04% |
2.09% |
Vanguard Information Technology ETF (NYSEMKT: VGT) |
0.09% |
0.48% |
Vanguard Growth ETF (NYSEMKT: VUG) |
0.04% |
0.43% |
Vanguard S&P 500 Growth ETF (NYSEMKT: VOOG) |
0.07% |
0.53% |
Vanguard Mega Cap Growth ETF (NYSEMKT: MGK) |
0.07% |
0.39% |
Source: Morningstar.com, as of March 12, 2025.
Note that the growth-oriented funds tend to have lower dividend yields. That's because many fast-growing companies don't yet pay dividends -- or pay relatively little -- as they're busy deploying most of their money into furthering their growth.
Here's what you may be most interested in: the ETFs' performance records. That's natural and important, but remember that past results are in the past. The future remains unknown.
If the stock market has one or a few bad years soon, these average gains will drop. The overall stock market has averaged annual gains of close to 10% over long periods, so the fairly steep S&P 500 returns below suggest that we've had more good years recently than bad.
ETF |
5-Year Avg. Annual Return |
10-Year Avg. Annual Return |
15-Year Avg. Annual Return |
---|---|---|---|
Vanguard S&P 500 ETF |
17.00% |
12.53% |
N/A |
Vanguard Total Stock Market ETF |
10.55% |
16.42% |
11.85% |
Vanguard Total World Stock ETF |
13.79% |
9.09% |
9.10% |
Vanguard Dividend Appreciation ETF |
14.27% |
11.36% |
11.95% |
Vanguard High Dividend Yield ETF |
14.45% |
9.99% |
11.63% |
Vanguard Value ETF |
14.86% |
10.27% |
11.36% |
Vanguard Information Technology ETF |
20.98% |
19.13% |
17.67% |
Vanguard Growth ETF |
18.48% |
14.42% |
14.82% |
Vanguard S&P 500 Growth ETF |
17.57% |
13.96% |
N/A |
Vanguard Mega Cap Growth ETF |
19.21% |
15.19% |
15.31% |
Source: Morningstar.com, as of March 12, 2025.
So...which of these ETFs might you invest in? Well, it depends. Here are a few thoughts:
Of course, it can be smart to opt for several of these funds. You certainly don't have to pick only one or two. There are many other terrific Vanguard and non-Vanguard ETFs out there, too -- some focused on particular sectors, such as healthcare or financial services or real estate. However you do it, be sure to be investing for your future financial security.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Selena Maranjian has positions in Amazon and Vanguard Index Funds-Vanguard Growth ETF. The Motley Fool has positions in and recommends Amazon, Vanguard Dividend Appreciation ETF, Vanguard Index Funds-Vanguard Growth ETF, Vanguard Index Funds-Vanguard Value ETF, Vanguard S&P 500 ETF, Vanguard Total Stock Market ETF, and Vanguard Whitehall Funds-Vanguard High Dividend Yield ETF. The Motley Fool has a disclosure policy.