Is it smart to invest in VOO?
The Vanguard S&P 500 ETF (VOO -0.55%) is one of the most popular investment options for index investors. And with good reason. Its low expense ratio and strong track record of tracking the index make it a great option for those simply looking to match the S&P 500.
VOO is also notable for its low cost. With an expense ratio of just 0.03%, it costs only $3 per year for every $10,000 invested. This low fee structure is a significant advantage, as high fees can erode investment returns over time. Investing in VOO can be as simple as buying and holding.
Best-In-Class Option For Large-Cap Investors
Vanguard S&P 500 funds offer well-diversified, market-cap-weighted portfolios of 500 of the largest U.S. stocks. The funds accurately represent the large-cap opportunity set while charging rock-bottom fees, a recipe for success over the long run.
Assuming an average annual return rate of about 10% (a typical historical average), a $10,000 investment in the S&P 500 could potentially grow to approximately $25,937 over 10 years.
VOO's analyst rating consensus is a Moderate Buy. This is based on the ratings of 505 Wall Streets Analysts.
Warren Buffett's Berkshire Owns 2 ETFs: SPY and VOO
If you want to buy what Buffett has at Berkshire, he has two ETFs listed on the 13F: SPDR S&P 500 ETF Trust SPY. Vanguard S&P 500 ETF VOO.
VOO 1 Year Total Returns (Daily): 24.31% for Feb. 16, 2024.
Vanguard S&P 500 ETF (VOO)
VOO has a dividend yield of 1.38% and paid $6.36 per share in the past year. The dividend is paid every three months and the last ex-dividend date was Dec 20, 2023.
An S&P 500 index fund can be used for a high-conviction, long-term bet on U.S. large-cap stocks. Our recommendation for the best overall S&P 500 index fund is the Fidelity 500 Index Fund (FXAIX). With a 0.015% expense ratio, this fund is the cheapest one on our list.
For example, if an investment scheme promises an 8% annual compounded rate of return, it will take approximately nine years (72 / 8 = 9) to double the invested money.
How long does it take to become a millionaire with S&P 500?
All that matters is how patient you are and which S&P 500 stocks you buy. Even if you only have $1 and never invest another penny, you can be a millionaire in 30 years. It's just that you'd need to hit a home run S&P 500 stock — which returns at least 58.5% — each year. That's a tall order, yes.
Here's a summary of which one to choose:
If you want to own only the biggest and safest stocks, choose VOO. If you want more diversification and exposure to mid-caps and small-caps, choose VTI. If you can't decide, consider simply buying both of them (assuming that commissions are low or free).
VOO - Performance Comparison. As of year-to-date, both investments have demonstrated similar returns, with SPY at 4.51% and VOO at 4.51%. Both investments have delivered pretty close results over the past 10 years, with SPY having a 12.49% annualized return and VOO not far ahead at 12.56%.
Buffett's favorite ETF
portfolio: the SPDR S&P 500 ETF Trust (NYSEMKT: SPY) and the Vanguard 500 Index Fund ETF (NYSEMKT: VOO). Both are index ETFs that track the S&P 500. Which of these two funds is Buffett's favorite? I think the evidence points to the Vanguard 500 Index Fund ETF.
A stickler for value, Buffett is likely a fan of the low fees that both of these ETFs feature. VOO has an expense ratio of just 0.03%, while SPY charges 0.09%. Both are extremely low fees, but it has to be said that VOO is cheaper.
Top Berkshire Stock Holdings
In Q3 of 2023, Buffett's Berkshire held steady on its two largest stock holdings: Apple (AAPL) and Bank of America (BAC). Apple stock is the No. 1 holding in Berkshire's Dow stocks-heavy portfolio by market value. It is the No. 2 holding by number of shares, behind Bank of America.
For example, if the average yield is 3%, that's what we'll use for our calculations. Keep in mind, yields vary based on the investment. Calculate the Investment Needed: To earn $1,000 per month, or $12,000 per year, at a 3% yield, you'd need to invest a total of about $400,000.
If you start by contributing $1,000 a month to a retirement account at age 30 or younger, your savings could be worth more than $1 million by the time you retire. Here's how much you should expect to have in your account by the time you retire at 67: If you start at 20 years old you should have $2,024,222 saved.
VOO has low fees, a low expense ratio, and no minimum investment. This makes it more accessible for newer investors who may not have an extra $3,000 to drop into VFIAX. As of March 2023, VOO has $774.8 billion in total assets and $274.3 billion in net assets with 507 total holdings.
There are typically 4 dividends per year (excluding specials), and the dividend cover is approximately 1.0.
Is it a good time to invest in the S&P 500?
In conclusion, while the S&P 500 is currently trading at all-time highs, this doesn't necessarily mean that it's a bad time to invest in stocks. By maintaining a diversified portfolio and seeking professional guidance, you can navigate the complexities of the market and work towards achieving your financial goals.
These are VanEck Vectors Semiconductor ETF SMH, Invesco NASDAQ 100 ETF QQQM, Communication Services Select Sector SPDR Fund XLC, Vanguard Mega Cap Growth ETF MGK, and Vanguard Consumer Discretionary ETF VCR. These funds are likely to continue outperforming should the existing trends prevail.
It's used to calculate the doubling time or growth rate of investment or business metrics. This helps accountants to predict how long it will take for a value to double. The rule of 69 is simple: divide 69 by the growth rate percentage. It will then tell you how many periods it'll take for the value to double.
$3,000 X 12 months = $36,000 per year. $36,000 / 6% dividend yield = $600,000. On the other hand, if you're more risk-averse and prefer a portfolio yielding 2%, you'd need to invest $1.8 million to reach the $3,000 per month target: $3,000 X 12 months = $36,000 per year.
But we need to multiply 85 by 6 year which give us: 510. We now add 1,000 and 510 together which gives us 1,510.
