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Orgo-Life the new way to the future Advertising by AdpathwayPicking the next Nvidia (NASDAQ: NVDA) or Palantir (NASDAQ: PLTR) could create enormous wealth. However, the big problem is identifying the company and investing in it before everyone else does.
But instead of trying to pick individual winners, which has proven to be incredibly difficult, investors can choose exchange-traded funds (ETFs) that capture potentially winning themes and markets. For example, instead of trying to find the next SK Hynix (NASDAQ: SKHY) while it's tiny, you could choose the Global X Artificial Intelligence and Technology ETF (NASDAQ: AIQ) and own a basket of stocks operating in the industry. You'll own some winners and some underperformers, but you will diversify away a lot of the risk of being wrong.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
For investors interested in taking an approach like this, these four ETFs offer great ways to invest in some of the market's best opportunities.
1. Vanguard Morningstar Total Stock Market ETF
The Vanguard Morningstar Total Stock Market ETF (NYSEMKT: VTI) is my choice for building the foundation of your portfolio. Investing in the S&P 500 (SNPINDEX: ^GSPC) has been incredibly popular during the past several years. But it's become very top-heavy in just a handful of mega-cap tech companies. The Vanguard Total Stock Market ETF includes large-, mid-, and small-cap stocks, more than 3,500 in all, giving you exposure to the entire U.S. stock market.
This ETF isn't terribly exciting, but it can be effective. It has a mix of large caps, mid caps, and small caps. That means you still own all the large companies that you're already familiar with. But if small companies outperform as they have during the past 18 months, you will capture that growth as well and likely outperform the S&P 500 in the process. This fund makes for a great core portfolio holding.
2. Schwab U.S. Dividend Equity ETF
The Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD) targets high-quality, financially healthy, dividend-paying stocks offering above-average yields. If your portfolio is heavy in growth or tech stocks, this ETF provides a nice balance. It focuses on companies that generate significant cash and have demonstrated the ability to withstand varying economic environments.
The Schwab fund evaluates return on equity (ROE), cash flow-to-debt, dividend yield, and dividend growth rate when selecting stocks. It currently has about 41% of its portfolio in consumer staples and healthcare stocks. Like the Vanguard Total Stock Market ETF, it won't be exciting. But it has a demonstrated track record of strong returns, and income seekers will appreciate the high yield.


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