There’s a common belief that starting to invest requires a significant amount of money. But today, it’s entirely possible to open a brokerage account with little to no initial capital and even begin with just one stock. In fact, you might only need less than a dollar to start investing. Exciting, right?
Whether you’re just getting started or looking to expand an existing portfolio, ultra-low-cost index ETFs are typically a smart choice. Many of them cover diverse markets and serve well as core long-term investments.
Here are five ETFs that stand out for their low fees, diversification, thoughtful index construction, and proven long-term performance.
1. Vanguard Total Stock Market ETF
The Vanguard Total Stock Market ETF probably ranks as one of the best core ETFs available. It tracks an index that encompasses nearly the entire U.S. stock market, which means you’re looking at around 3,500 stocks from various sectors and sizes.
This ETF is a favorite among many investors, but I personally prefer it over the Vanguard S&P 500 ETF because it includes mid-cap and small-cap stocks that can have different effects on the market and possess high growth potential—making it great for diversification.
2. Schwab US Dividend Stock ETF
For dividend-focused investments, the Schwab US Dividend Stock ETF stands out as a solid choice. Its selection strategy carefully targets stocks known for good balance sheets, sustainable dividend growth, and attractive yields.
The fund invests in resilient companies that are designed to thrive across various economic environments, and it currently offers a yield of about 3.3%. This makes it appealing for those looking to generate income from their portfolios.
3. Invesco NASDAQ-100 ETF
The Invesco NASDAQ-100 ETF is frequently favored in the tech sector. Although about two-thirds of its holdings are tech stocks, it includes major players in tech and AI—industries that are key to market returns and innovation.
This segment of the market tends to lead movements in the U.S. stock market, so having this ETF in your long-term portfolio can be a wise decision. It’s worth noting that it also relates to the Invesco QQQ ETF.
4. Vanguard Mid-Cap ETF
Investing in the Vanguard Mid-Cap ETF allows you to tap into the often-overlooked space between large-cap and small-cap stocks. Historically, this market segment has shown competitive risk-adjusted returns that shouldn’t be dismissed.
While mid-cap stocks have lagged a bit during the AI boom, they’ve actually outpaced the Vanguard S&P 500 ETF by over one percent this year. As profits shift beyond the well-known “Magnificent Seven,” these stocks might offer a great balance of growth potential and lower volatility.
5. Vanguard Small Cap ETF
The Vanguard Small Cap ETF dives into some of the riskier yet potentially rewarding parts of the U.S. stock market. Though these companies might be less established, they often represent fast-growing possibilities.
This area usually features a large number of unprofitable firms, which makes sense since many of them are still in growth mode. Still, not every company will succeed. However, with over 1,300 stocks in the fund, a few bankruptcies likely won’t cause major disruptions. Having a well-diversified portfolio in this area can be advantageous.
All of these ETFs share appealing features for anyone looking to invest for the long haul. They each target different market segments, allowing you to create a mix that suits your financial goals. With their low costs and variety, these selections are solid choices for anyone looking to build an investment strategy, no matter how much you can put in.
