Investing in the stock market is one of the simplest and most effective ways to build life-changing wealth, but choosing the right investments is essential.
Some investments promise to make you rich overnight, but they carry so much risk that you may lose more than you gain. Other investments may be extremely low risk, but their returns are so low that it’s difficult to grow your savings.
While there is no one right way to invest and everyone has different preferences, there is an ETF that can both limit your risk and help you maximize your income. With a bit of luck, you might even be able to double your money in 2024.
Increase your income with a growth ETF
THE Vanguard Growth ETF (NYSEMKT:VUG) can be a smart option for those who want to beat the market with minimal effort.
This fund contains 221 stocks with above-average growth potential. The top 10 holdings make up about half of the fund’s total composition, and these stocks come from giant companies such as Apple, Microsoft, Amazon, You’re hereAnd Nvidia. The rest of the ETF is therefore made up of dozens of small stocks of emerging companies.
This balance between big and small actions can help you limit your risk while maximizing your rewards. Blue chip stocks may not be experiencing explosive growth, but they are much more stable and secure than many smaller stocks. Smaller businesses carry more risk, but if even one becomes a powerful player, you could potentially make a lot of money.
Additionally, although growth ETFs tend to take a hit during periods of volatility, they often skyrocket when the market is booming. Over the past 10 years, for example, the Vanguard Growth ETF has surged 238%. Meanwhile, the S&P500 only grew about 160% during that time.
In the short term, this type of fund could therefore be more volatile than, for example, an S&P 500 ETF. But if you stay invested over the long term, you could potentially achieve above-average returns.
Can you double your money in 2024?
Whether or not this ETF will double your money over the next year will largely depend on overall market performance. In recent weeks, stock prices have surged, which is promising news for this investment. But if the market takes a turn for the worse, this ETF could quickly lose value.
If the market does well, it’s possible that this ETF could double your money in as little as a year. But if you’re willing to invest longer, you could earn a lot more.
Say, for example, you invest $1,000 in the Vanguard Growth ETF today and continue to invest $100 per month. Over the last 10 years, this fund has achieved an average annual return of almost 14% per year. But to play it safe, let’s assume you only get an average return of 12% per year, which is a bit more than the average return of 12% per year. historical market average.
At that rate, here’s approximately how much you could earn over time, depending on the number of years you have to invest:
Number of years | Total portfolio value |
|---|---|
1 | $2,300 |
ten | $24,200 |
20 | $96,100 |
30 | $319,600 |
40 | $1,013,600 |
Data source: Author’s calculations via invest.gov.
If you choose to invest in the Vanguard Growth ETF, make sure the rest of your portfolio is well diversified. Although this ETF aims to limit risk through its mix of stocks, growth ETFs in general can still be more volatile than other funds. When this ETF is part of a portfolio full of healthy, long-term investments, your money will be safe no matter what the market does.
Investing in the stock market can help you make a lot of money over time, but the right investments are essential. If you’re able to take a long-term view and are willing to weather periods of volatility, the Vanguard Growth ETF might be a good fit for your portfolio.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Katie Brockman has positions in Vanguard Index Funds-Vanguard Growth ETF. The Motley Fool has positions in and recommends Amazon, Apple, Microsoft, Nvidia, Tesla, and Vanguard Index Funds-Vanguard Growth ETFs. The Mad Motley has a disclosure policy.
1 Unstoppable Vanguard ETF That Could Double Your Money in 2024 and Beyond was originally published by The Motley Fool
