You'll often hear the phrase VOO and chill or sometimes VTI and chill. VOO is the ticker to Vanguard's S&P 500 index ETF (VTI is Vanguards total U.S. market ETF). The idea is to invest all of your money in the S&P 500 (or perhaps the total U.S. market) and just relax.
After my video showing my 2021 portfolio tracked the performance of the S&P 500 (more or less), many asked why I bothered with multiple asset classes and individual stocks. Why not just VOO and chill?
This video explains why, and more importantly, walks through some concepts that might help you decide what's best for your portfolio.
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ABOUT ME
While still working as a trial attorney in the securities field, I started writing about personal finance and investing In 2007. In 2013 I started the Doughroller Money Podcast, which has been downloaded millions of times. Today I'm the Deputy Editor of Forbes Advisor, managing a growing team of editors and writers that produce content to help readers make the most of their money.
I'm also the author of Retire Before Mom and Dad--The Simple Numbers Behind a Lifetime of Financial Freedom (
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VOO and Chill | Is An S&P 500 Index Fund Portfolio a Smart Idea? Investing in the stock market can be an overwhelming task, especially for beginners. With numerous investment options available, it can be challenging to determine which approach is the most suitable for your financial goals. However, one investment strategy that has gained popularity among investors is building a portfolio around an S&P 500 index fund, such as VOO. VOO, also known as the Vanguard S&P 500 ETF, is an exchange-traded fund that tracks the performance of the S&P 500 index. The S&P 500 is a widely recognized stock index comprising the 500 largest publicly traded companies in the United States. By investing in VOO, an investor gains exposure to these 500 companies and can benefit from their combined growth. The primary advantage of investing in an S&P 500 index fund like VOO is the diversification it offers. Instead of investing in individual stocks, which can be risky, VOO allows investors to spread their investment across a wide range of companies. This diversification mitigates the impact of any particular company's performance, reducing the overall risk of the portfolio. It also ensures that investors are partaking in the growth of the overall U.S. stock market. Furthermore, investing in an S&P 500 index fund is a cost-effective option for investors. Since these funds are passively managed, they have lower expense ratios compared to actively managed funds. The lower costs translate into higher returns for investors over the long term, as fees and expenses can eat into investment gains. Additionally, VOO has a low turnover rate, which minimizes capital gains taxes, making it even more appealing to long-term investors. Another advantage of VOO is the ease of implementation and maintenance. Setting up a portfolio with VOO is a straightforward process, making it an attractive option for beginners who may find the stock market intimidating. Additionally, since the fund aims to replicate the S&P 500 index, investors do not need to continually monitor and adjust their portfolio. This simplicity can be particularly appealing to individuals who prefer a hands-off approach to investing. However, it is important to note that investing in an S&P 500 index fund like VOO is not without its drawbacks. One significant disadvantage is the lack of exposure to smaller companies and sectors that may outperform the overall market. While the S&P 500 index consists of well-established and reputable companies, it may not capture the growth potential of smaller, yet promising, enterprises. Therefore, investors seeking potentially higher returns may consider supplementing their VOO portfolio with other investments focused on specific sectors or market segments. Additionally, although the S&P 500 has historically delivered strong returns over the long term, past performance does not guarantee future results. Market fluctuations and economic uncertainties can impact the performance of the index and, subsequently, the VOO fund. Therefore, investors should be mindful of their investment horizon and risk tolerance when considering an S&P 500 index fund. In conclusion, building a portfolio around an S&P 500 index fund like VOO can be a smart idea for many investors. The diversification, low costs, ease of implementation, and long-term performance potential make it an attractive investment option. However, investors should be aware of the limitations and potential risks associated with investing solely in an index fund. For those seeking a relatively hassle-free and cost-effective way to participate in the growth of the U.S. stock market, VOO might just be the right choice. So, VOO and chill while your investment portfolio grows steadily. https://inflationprotection.org/is-investing-in-voo-an-sp-500-index-fund-portfolio-a-wise-decision-for-relaxing-and-earning/?feed_id=135829&_unique_id=65022dfe7f0e0 #Inflation #Retirement #GoldIRA #Wealth #Investing #sp500 #sp500indexfund #stockmarket #stockmarketinvesting #VOO #vooandchill #VTI #vtiandchill #FidelityIRA #sp500 #sp500indexfund #stockmarket #stockmarketinvesting #VOO #vooandchill #VTI #vtiandchill
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