What is best to invest in
10 Best Investments In 2020
my favorite way of investing is to take
just a tiny bit of money and make it
worth more
than what we've started with but the
problem is is that's just not quite
enough money yet
so let's make it worth a lot more by
taking it
and making it worth a lot more that's my
favorite way of investing but my second
favorite way is with etfs which is what
this video is all about
let's begin
my name is andre jake welcome back hope
you had a great week and let's get right
into the top 10 etfs or exchange traded
funds which
think of them like this simple deck of
cards which let's say is
worth 20 now your 20 will be spread out
amongst
all of these different stocks right here
contained inside of this
one fund now some of these companies or
stocks will be worth
more than others but the point of trying
to do this is to achieve full
diversification which is just a fancy
way of saying that
even though you might have a favorite
playing card you still need
the entire deck of cards to be able to
play that game of investing effectively
if that analogy made zero sense
all i'm trying to say is that i'm really
good with a deck of cards
but also never to have all of your money
into one playing card because if you
lose
that playing card you lose all your
money and that's never
stonks now as of right now there are
more than 2
000 etfs to pick from which means it is
very
difficult to decide which of the etfs
are best to buy right now
so i want to share with you my top 10
favorite etfs this is by no means the be
all
end-all guide of the best etfs this is
just what one random guy on the
internet's opinion
is and remember i play with playing
cards so keep all that in mind
now the first five i'm gonna share with
you are going to be growth oriented
and the other five are going to be cash
flow or dividend oriented which means
i don't actually have to sell those etfs
in order to make money because they pay
me either monthly or
quarterly now there are pros and cons to
both of them
but hopefully this guide will at least
point you in the right direction so you
can decide
which of these etfs works best for you
and remember
you could pick more than just one etf
you could pick two three four five as
many as you want
so having said all that let's dive right
into the top five
growth etfs and coming in at number one
is vt
let me ask you something how many stocks
do you want to own yes
by owning one vt stock you own the
entire world
you own the us market you own the
international market
basically a james bond villain at this
point but if you believe
that the world will be in a better place
20 to 30 years from now
you're going to do good and you might
want to consider this etf now because it
is
so diversified it's only returned around
5.7
since the fund was created in comparison
to u.s markets which has returned around
seven percent but vanguard thinks that
in the next 10 years
international markets are going to do
better than u.s markets
but warren buffett who's the smartest
investor in the world disagrees
but regardless of which is true one
thing is true and that's that no one has
a clue
pro tip by the way you can own something
like vt but at a slightly cheaper
expense ratio
by owning a combination of around 55 vti
and 45 vx us in doing this you'll save
yourself a tiny bit of money
especially if you have buku bucks where
point zero one percent will make some
difference
it's just another way of doing it and at
number two is qqq
now this is a very popular investment
option and i want to cover it in the
early 1900s things like
steel material and heavy industry was
the sector to invest in
we were building railroads bridges roads
infrastructure
so that sector boomed but nowadays it's
just a stable dividend sector with
nothing to brag about today of course
the
hot sector is technology and we've got
companies like apple
google amazon facebook tesla myspace
just checking to see if you're still
awake smash the like button if
myspacetom was your only friend
but by owning qqq you're gonna own more
than 100 companies from the nasdaq
that is very heavily weighed in
technology and because we are entering
the
age of technology 20 to 30 years from
now we could look back at this moment in
history and think
wow 2020 was just the beginning of
technology and we thought
it was overpriced or 30 years from now
we could look back and think
2020 was way overvaluing technology and
the best products were already created
but generally speaking
sector dominance is usually temporary or
cyclical and i know it's very tempting
to look at that graph and just assume
it's going to keep on growing like that
for the next 10 years and maybe it will
because with great power comes great
responsibility peter
which means if you want those big
returns you have to take the bigger risk
so if you're younger this fund might be
for you but just remember
this fund's beta is at 1.13 which means
it's a little bit more volatile than the
general stock market which also means
you better like emotional roller
coasters because you just bought
yourself a one-way ticket
and coming in at number three is arc
fund or ark
now this one is an actively managed fund
versus a passively managed one
an actively managed one means that there
is a real human being
who's working day and night to find
these stocks and for that reason
we have to pay a higher expense ratio of
0.75 percent which means
75 for every 10 000 that we invest here
which doesn't sound like a lot but it's
actually a lot of money when comparing
it to a lot of other funds but this one
specifically is run by kathy wood who
looks at disruptive technologies to try
to outperform the market
and she actually has because one of the
core holdings of
arc is tesla and it's performed
incredibly well this year
get this in the last year alone arc has
performed
65 gains which is insane
when comparing the overall stock market
return which has an average of
seven percent per year versus 65 percent
but its greatest strength is also one of
its greatest weaknesses because
it's actively managed and there's very
little evidence to show that
humans can beat passively managed funds
over many decades of time
there's just very little evidence to say
that we as humans can pick better stocks
than just
following the market trends so yes this
year it might be up 65
but maybe next year technology doesn't
do quite as well and it won't perform as
well but regardless if you are an ultra
aggressive investor for growth
then you might want to consider this
stock coming in at number four is the
voo
which is vanguard's s p 500 etf which is
a fancy way of saying that it tracks the
top 500 companies in the whole united
states
and you really can't go wrong with this
one it's a core holding in a lot of
people's portfolios
and its closest siblings would be
something like s d
y or s p y or spy cause i russian but
actually
s p y according to some studies because
it's got a cooler sounding ticker symbol
might actually help it perform better
than other
non-cooler sounding ticker symbols it's
weird and lastly number five is my
personal favorite and that is vti
every single working person in america
every single ceo with their fancy suits
and ties
is working every single day to make you
more money it's a really cool feeling
because you can walk into any store in
the u.s
pick up an item and say i own this but
only theoretically because
if you try to run out with that item
you'll probably get arrested but don't
try to explain to the officer that you
own point zero zero zero zero zero
zero one percent of that item because
you own vti it won't go well
trust me now my top two favorite growth
etfs vti and voo
are both virtually the same with voo
being just slightly better but they both
own the top 10 companies
that are the exact same thing but really
they are interchangeable and if you like
big companies then you should go with
voo and if you want to own all the
companies
then just go with bti but you'll not go
wrong with either one of them and you
don't have to pick one or the other you
could just own both and that's fine as
well but pro tip if you buy something
like
voo or vti and you put in 80 of your
money into that
and the other 20 into vbtlx which is a
bond etf to
smooth the ride as jl collins says then
you can be set for the rest of your life
you can literally stop watching this
video but please don't because you'll
miss out
on the cash flow and the passive income
dividend etfs
and i'll miss out on the ad revenue but
i love this fund so much
that i put it all inside my m1 finance
roth
retirement account and i did a video
with that you can watch it
please use the link down below to help
my wallet you don't have to
but please do now let's talk about cash
flow or
dividend oriented etfs now these could
pay either monthly
or quarterly because uh it's 25 cent
piece it took me forever to do that move
and coming in at number five is noble
now if dividend aristocrats could have
their own etf
then this is literally it because the
only companies inside of here
are ones that have increased their
dividend for 25 straight years or
longer that's pretty cool even though
the dividend yield is only 2.2 percent
they've grown that dividend by about 12
in the last five years
the downside is you're going to trade a
lot of growth for that stability
but not everybody cares about the yield
so you might want to consider adding
this one to your portfolio especially
if you're older and you really value
that stability and the pedigree and
history of having companies pay you
on time coming in at number four is schd
which is the charles
schwab u.s equity dividend fund this one
has a sweet spot yield of 3.44
it's dirt cheap to own at just six
dollars for every 10k
invested it's grown in value over time
which is exactly what we want to see
and in the last five years it's grown
its dividend by 10
which is great in the last year alone
it's grown its dividend by 20
it pays us quarterly and it's just an
all-around
solid dividend etf and coming in at
number three is vig which stands for
very good no it doesn't it stands for
vanguard's dividend appreciation
fund and it accepts companies that have
increased their dividends for 10 plus
years now as dividend yield is only at
1.81
but what it lacks in yield it makes up
for in growth
because it's a grower not a shower but
one way to substitute
vig is with dgro which is the exact same
principle
except the companies in this etf are
ones that have increased their dividends
by
five plus years but the two are almost
identical and coming in at number two is
vym which is vanguard's high dividend
yield etf
right now its yield is at 3.5 and since
the fund was created it has returned an
average of around
6.7 which is pretty in line with the
stock market
it's got a really dirt cheap expense
ratio of 0.06
as well and by owning this one stock you
will own
428 different stocks which means you
will be extremely well diversified
there's not that many bad things i can
say about it it's an all-around amazing
etf which i'd like to own more of
and at number one is sp hd now i have
around six thousand seven hundred
dollars invested into this one
and it's paying me around five point
five percent which is an extremely high
yield
but it's got a pretty high expense ratio
to boot point three percent which
doesn't sound like a lot
but it is actually a lot the good thing
though is that it pays me monthly
but it's not necessarily my number one
favorite i like a lot of these on this
top five list for different reasons
some of them have better growth and
lower yield and other ones have lower
growth and higher yield
it's a balancing act but whichever one
you choose you really can't go wrong
with any of these but before you quit
this video thinking
cool got my list never seen that guy's
videos again not so fast because if you
don't watch this next part
you're going to make this very common
mistake you're going to open up your
brokerage account you're going to look
through all the other dividend etfs that
people are buying
and you're going to see one that's
called sdiv the super dividend etf which
sounds like what my childhood dreams are
made of
no but seriously imagine a super saiyan
etf at least that transformed into a
super saiyan right away
instead of screaming at you for half an
hour before i did it but anyway you're
going to find sdiv and you're gonna see
the monstrous 12
dividend yield you're gonna see that it
pays you monthly and that you could earn
more money with a hundred thousand
dollars than i'm earning with two
hundred thousand dollars
so why not then just put all of your
money into sdiv
audrey was an idiot i found something
way better but there's a few reasons why
you shouldn't do this
and reason number one it's got a pretty
high expense ratio of 0.6
which doesn't sound like a lot when
you're making 12 right
not exactly because when you have a
dividend yield that high
that means it's probably investing in
companies that are unstable
and whose prices are falling lower and
lower because there's an
inverse relationship between the
dividend yield and the price
as the price gets lower the dividend
yield goes higher
and because of that look at what the
sdiv stock price has done
since 2011. you see that that's your
money curling up into a fetal position
like voldemort at king's cross but if
you invested a hundred thousand dollars
in 2011
sure you would have made some money with
your dividends but after
all that time your 100 000 would be
worth less than
half of what it was when you originally
invested so it's almost like you're not
really making money
you're just robbing it from one place
and putting it somewhere else but as
you're running
the bills are just falling behind you so
you're actually not doing anything and
that's what's called a value trap which
is a mistake
a lot of people will make because they
didn't get to this point in the video
remember that investing is a long-term
game and you're better off going with
something more conservative today
something like a two percent dividend
yield because 20 30 years from now after
holding that fund
you could increase your yield on cost to
something like four
or five six percent or even more and we
want that trifecta right
we want that principal equity to grow in
value meaning the stock price itself is
increasing
we want those dividend payouts and we
want those dividend payouts to increase
over time
but better yet you're probably better
off going with just vti
and you'll outperform most of the
average dividend investors
probably not a guarantee but probably
dividends give you a really good peace
of mind but if you like growth investing
then you really can't go wrong with the
etfs that i've provided
but whatever you do before you invest
just make sure you do your own research
because you can always lose money
especially
short term long term though you'll
probably end up making money because the
stock market has been
the best performing asset class in the
entire world but having said that i'm
sure i've missed a few of your favorite
etfs and if i have
let me know in the comments below and
i'll try to include them maybe in part
two but in the meantime if you've not
already done so
sign up with weibo for free you'll get a
free stock fund your account 100
get a second free stock valued up to one
thousand four hundred dollars in value
your third free stock from robin hood
and i totally sound like a salesman now
but you can also join my free discord
link below
follow me on instagram i post from time
to time love you lovely people i will
see you back here on monday and friday
and before i go i have a very important
question for you which is
which one is your favorite etf but more
importantly is a hippopotamus
a hippopotamus or a really cool
hippopotamus
i'll see you soon bye
[Music]
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