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It is probably helpful to explain individual investment vehicles and why it is sane for someone new to invest. VTI is an ETF that is basically representative o

by mrtron 9y ago

It is probably helpful to explain individual investment vehicles and why it is sane for someone new to invest. VTI is an ETF that is basically representative of the entire US market. It is somewhat like holding a little bit of everything in the US market. If you have a bunch of cash sitting in a savings account, and instead want that cash tethered to the swings of equities market, VTI is a reasonable choice.

kfrzcode 9y ago
Thanks for this, can you explain the others the parent mentions?
- bradleyjg 9y ago
  VYM is an index fund that tracks the FTSE High Dividend Yield Index invests in global equities (excluding REITs) with high dividend yields. About 1/3 of the current index is in 10 stocks all US: Microsoft Corp., Exxon Mobil Corp., Johnson & Johnson, JPMorgan Chase & Co., Wells Fargo & Co., General Electric Co., AT&T Inc., Procter & Gamble Co., Pfizer Inc. and Chevron Corp. QYLD is even more exotic. It seeks to track the CBOE NASDAQ-100 BuyWrite Index. That index in turn seeks to track the performance of a theoretical portfolio of the 100 largest NASDAQ stocks on which covered calls are written with a certain formula. Covered calls are a type of options strategy. I'm just another rando on the internet, but I would recommend neither VYM nor QYLD to people new to investing who aren't sure what to buy. VTI is a far more appropriate suggestion. As would be VT (like VTI but looking at all stock markets), BND (index fund for US investment grade bonds), and maybe BNDX (ex-US investment-grade bonds with currency hedges)
  - tanderson92 9y ago
    I'm just another rando on the internet, but I concur with bradleyjg. Consider reading some of John Bogle's books or reading the Bogleheads wiki page. You cannot go too wrong with (VT / (VTI+VXUS) ) + BND.
  - nerfhammer 9y ago
    BND is composed very heavily (~66%) of US Government bonds. It's largely effectively like just buying treasury bonds. Worth considering to instead get a corporate bond index fund + muni bond fund.

by mrtron 9y ago

kfrzcode 9y ago

Thanks for this, can you explain the others the parent mentions?

bradleyjg 9y ago
VYM is an index fund that tracks the FTSE High Dividend Yield Index invests in global equities (excluding REITs) with high dividend yields. About 1/3 of the current index is in 10 stocks all US: Microsoft Corp., Exxon Mobil Corp., Johnson & Johnson, JPMorgan Chase & Co., Wells Fargo & Co., General Electric Co., AT&T Inc., Procter & Gamble Co., Pfizer Inc. and Chevron Corp. QYLD is even more exotic. It seeks to track the CBOE NASDAQ-100 BuyWrite Index. That index in turn seeks to track the performance of a theoretical portfolio of the 100 largest NASDAQ stocks on which covered calls are written with a certain formula. Covered calls are a type of options strategy. I'm just another rando on the internet, but I would recommend neither VYM nor QYLD to people new to investing who aren't sure what to buy. VTI is a far more appropriate suggestion. As would be VT (like VTI but looking at all stock markets), BND (index fund for US investment grade bonds), and maybe BNDX (ex-US investment-grade bonds with currency hedges)
- tanderson92 9y ago
  I'm just another rando on the internet, but I concur with bradleyjg. Consider reading some of John Bogle's books or reading the Bogleheads wiki page. You cannot go too wrong with (VT / (VTI+VXUS) ) + BND.
- nerfhammer 9y ago
  BND is composed very heavily (~66%) of US Government bonds. It's largely effectively like just buying treasury bonds. Worth considering to instead get a corporate bond index fund + muni bond fund.