"Perhaps one of the most important metrics long-term investors can forget about when building their portfolios is the cost of constructing these groupings of stocks. Indeed, whether it's outright cost (in the form of an expense ratio for owning an ETF) or the cost associated with the time and effort to research individual stocks and input them into one's portfolio (even if there are no associated trading fees for these moves), investing can be an expensive exercise."
"For those looking to put some capital to work on their own, and avoid the fees money managers can charge (one of the best pieces of advice I've ever been given for my long-term investing journey), I think picking individual stocks and ETFs is a worthwhile exercise. That's partly because I have an interest in diving into particular companies and ETFs, but to each their own."
Investing incurs both explicit costs, such as ETF expense ratios, and implicit costs from time and effort to research and add individual stocks. Avoiding money manager fees motivates many investors to pick individual stocks and ETFs directly. Vanguard offers several extremely low-cost ETFs suitable for long-term investing. The Vanguard S&P 500 ETF (VOO) has an expense ratio of 0.03% and tracks the S&P 500, providing exposure to the benchmark most investors use to gauge performance. Buying broad-market exposure is a practical strategy for investors who prefer not to try to beat the market. VOO functions well as a long-term holding.
Read at 24/7 Wall St.
Unable to calculate read time
Collection
[
|
...
]