Investing in exchange-traded funds (ETFs) can be a simple way to generate wealth with minimal effort. One popular option is the Vanguard Information Technology ETF (VGT), which offers instant diversification into dozens of stocks from the tech industry.
With 314 stocks representing major players like Apple, Nvidia, and Microsoft, VGT provides a balance of risk and reward. This fund’s focus on established companies helps mitigate volatility, but it’s essential to consider the risks associated with investing in the tech sector.
The past decade has shown impressive returns for VGT, with an average annual rate of return of 20.59%. However, this industry is more volatile than others, and downturns can be severe. The ETF dropped by nearly 35% during the 2022 bear market, but has since recovered strongly.
To protect your portfolio, it’s crucial to diversify beyond a single tech-focused fund. Consider adding broad-market or total stock market ETFs, which expose you to stocks from various industries. Alternatively, building a custom portfolio with individual stocks from other sectors can help mitigate risk.
If done correctly, investing in VGT as part of a well-diversified portfolio could supercharge your earnings with minimal effort. By taking calculated risks and considering the unique characteristics of this ETF, investors can potentially earn above-average returns in 2025.
Source: https://www.fool.com/investing/2024/12/07/1-unstoppable-vanguard-etf-im-stocking-up-on-in-20