Investing in individual stocks can be a fun and rewarding experience. But if you want your money to grow as much as possible over your lifetime, you’re probably better off sticking with Exchange Traded Funds (ETFs). After all, the vast majority of professional traders fail to beat the market in the long term. The two ETFs below have a strong track record and can be held for decades to come.
This could become the best performing ETF of all time
Few investments have performed so well Bitcoin (CRYPTO: BTC) since its inception in 2009. In the beginning, a single Bitcoin could be purchased for pennies. Today, a single Bitcoin fetches more than $60,000. In the past decade alone, Bitcoin’s price has beaten the odds S&P500 by more than 17,000%.
Of course, Bitcoin’s growth in the future may not be as impressive as it has been in the past. But chances are that the crypto takeover is still in its infancy. Even as a store of value, Bitcoin has a lot of room. For example, Bitcoin’s total market capitalization is currently around $1.3 trillion. Gold, meanwhile, has a total market capitalization of about $18 trillion. So just to match gold’s position as a store of value – a reasonable expectation over the longer term – Bitcoin would potentially have an additional 1,800% upside. And that doesn’t even include the utility value of its place in the broader crypto universe.
Buying Bitcoin directly can be difficult from a custody and tax perspective. The iShares Bitcoin Trust ETF (NASDAQ: IBIT) removes this complexity, allowing you to gain exposure to Bitcoin’s price movements through a simple ETF that is tradeable with virtually any investment account. The ETF’s expense ratio is reasonable at 0.12%. And its simplicity allows you to average dollar costs over time. So you can start with as little as $100 and gradually grow your position over time. If Bitcoin’s future is anywhere near as exciting as its past, ETFs like these could top the charts of history’s best-performing investment vehicles.
If you can’t beat them, join them
Investing in Bitcoin ETFs is a great way to create significant upside for your portfolio. But don’t forget the most classic power generator of all time: the Vanguard S&P 500 ETF (NYSEMKT:VOO).
According to research, most professional money managers fail to beat the market in any given year. The longer the investment period, the fewer professionals can track market indexes such as the S&P 500. For example, over the past two decades, fewer than 10% of actively managed funds have beaten the market.
By purchasing Vanguard’s S&P 500 ETF and holding it for the long term, you will immediately become one of the best-performing investors in the industry because your turnover will be much lower than that of active traders. You’ll also likely have a lower tax bill, given the tax structure for ETFs.
So while expanding into exciting categories like Bitcoin ETFs can give your portfolio a long-term edge, don’t shy away from investing the majority of your portfolio in one of the most proven investments of all time: a low-cost ETF that tracks the price of your portfolio follows. a major market index such as Vanguard’s S&P 500 ETF. You can start with as little as $100, with the dollar cost working its way to a significant fortune over time.
But whether you invest exclusively in a Bitcoin ETF or a market index ETF – or perhaps just split your savings evenly between the two – don’t forget to enable automatic investing. This way, your trading account can automatically invest $50, $100, or $200 in these ETFs every month without you having to lift a finger. Because besides choosing the right ETFs, the most important thing you can do for your financial future is to set up a regular investment schedule that puts your money to work.
Don’t miss this second chance at a potentially lucrative opportunity
Have you ever felt like you missed the boat on buying the most successful stocks? Then you would like to hear this.
On rare occasions, our expert team of analysts provides a “Double Down” Stocks recommendation for companies they think are about to pop. If you’re worried that you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
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Amazon: If you had invested $1,000 when we doubled in 2010, then you have $21,285!*
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Apple: If you had invested $1,000 when we doubled in 2008, you would have $44,456!*
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Netflix: If you had invested $1,000 when we doubled in 2004, you would have $411,959!*
We’re currently issuing ‘Double Down’ warnings for three incredible companies, and another opportunity like this may not happen anytime soon.
See 3 “Double Down” Stocks »
*Stock Advisor returns October 14, 2024
Ryan Vanzo has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.
2 Simple ETFs to Buy with $200 and Hold for Life Originally published by The Motley Fool
