America’s stock market is an area that will help you make good money. But you will only get cash if you start to see into securities. Often, shares and bonds are held in accounts with specially created ETF funds. Such portfolios help to competently diversify investment in securities with a minimum investment of time and money.
How to choose securities to invest in
ETF funds offer complete portfolios of shares and bonds. These are tools for the purchase or sale of which you do not need to contact the management company. Transactions are made in terminals or trading applications. Of course, the liquidity of such securities will be slightly lower than in classic trading. But the transaction costs are also reduced.
There are now over 2,000 ETFs in the US market. They allow you to manage the broad market for stocks or bonds, as well as individual securities in the sector of your choice.
One of the most diversified funds is the Vanguard Total Stock Market ETF (VTI). Here, clients are offered about 4,000 securities. The fund’s profitability at the beginning of 2021 was more than 14%. If we look at the statistics for the last three years, we get almost 50%.
The main funds for investing in securities on the index are:
- S&P 500 SPDR S&P 500 ETF Trust (SPY);
- iShares Core S&P 500 ETF (IVV);
- Vanguard S&P 500 ETF (VOO).
Here you can buy 505 index securities each. Moreover, for each of them, there is an opportunity to receive good dividends. Since the beginning of 2021, traders have earned up to 21% per annum.
These four funds are the most liquid on the market. There are $401 million in assets in the largest of them. The daily turnover exceeds $62 million. Clients are offered fairly wide rates on the stock market. Diversification is carried out at the expense of a huge number of securities. You will be able to purchase shares of companies such as Apple, Microsoft, Amazon, Tesla. They account for a little over 24% of the total turnover.
If you decide to buy securities with ETFs, you will get a minimum entry threshold. Even unskilled investors can make good money. Buy and sell spreads here are slightly higher than in classic trading, and the commission is less than 0.1% per year.
You can invest both using active strategies and passively managing your investments. We recommend combining the purchase of securities with gold and other metals.
In general, there are many options for combinations of buying equity funds. But it is better to form such a portfolio for a period of one year, depending on the goals. If you want to profit from medium-term operations, choose a narrower focus. Short positions can be acquired using inverse ETFs. They will cost even less than futures transactions.
It is up to you to decide whether to invest in securities on the American market. Also, only you can determine for yourself in which particular area you want to invest money. But let’s say right away that if you select investments, then you can get a good income.