2 ETFs I am LOADING Up On

Introduction

In this tutorial, we will explore two ETFs (Exchange-Traded Funds) recommended by Mark Roussin, CPA, that can enhance your investment portfolio. One ETF focuses on growth, while the other emphasizes value and dividends. Whether you're a seasoned investor or just starting out, these ETFs could be valuable additions to your strategy.

Step 1: Research the First ETF

Identify the growth-focused ETF. In this case, it is not specified in the transcript, but common examples include

• VOO (Vanguard S&P 500 ETF)
• QQQ (Invesco QQQ ETF)

Investigate the ETF’s historical performance

• Look at the performance over the past 1, 3, and 5 years.
• Analyze how it has reacted during market downturns.

Understand the underlying assets

• Review the top holdings within the ETF.
• Evaluate the sectors represented and their growth potential.

Practical Tip:

When researching an ETF, consider using financial news websites or platforms like Morningstar or Yahoo Finance to gather comprehensive data.

Step 2: Research the Second ETF

Identify the value and dividend-focused ETF, which may include options like

• SCHD (Schwab U.S. Dividend Equity ETF)
• VYM (Vanguard High Dividend Yield ETF)

Analyze the ETF’s dividend yield and payout history

• Look for consistency in dividend payments over the years.
• Check the yield compared to other investments.

Assess the valuation of the ETF’s holdings

• Research the price-to-earnings ratio (P/E) of the underlying stocks.
• Determine if the ETF is undervalued compared to its peers.

Common Pitfall to Avoid:

Don't focus solely on high dividend yields; ensure that the underlying companies are financially sound and able to sustain dividend payments.

Step 3: Evaluate Your Portfolio

Determine how these ETFs fit within your existing investment strategy

• Assess your risk tolerance and investment goals.
• Check if your portfolio is balanced between growth and value.

Consider diversification

• Ensure that adding these ETFs will not overly concentrate your investments in specific sectors.
• Look for complementary assets to balance your portfolio.

Step 4: Make an Informed Investment Decision

Decide on the amount you want to invest in each ETF

• Consider your overall investment budget and goals.

Choose a brokerage platform to purchase the ETFs

• Research platforms that offer commission-free trading for ETFs.

Execute the trade

• Place a market or limit order based on your investment strategy.

Practical Tip:

Consider dollar-cost averaging by investing a set amount at regular intervals to mitigate market volatility.

Conclusion

By conducting thorough research on the selected ETFs and evaluating their fit within your investment strategy, you can make informed decisions that align with your financial goals. Remember to continually monitor your investments and adjust your portfolio as needed. Happy investing!