Tesla, Plug Power, Fiverr, Stitch Fix, Sunrun, Zillow, Chewy, Pinterest, and Peleton – the list goes on. Many stocks soared last year, rising more than 100%. Do you feel like you’re on the outside looking in as others get rich buying stocks highlighted by a few storybook names?
It would take hundreds of thousands of dollars to buy every company traded on the market. If you could, it would give you access to high-flyers – at all times. Yet, there is a way to buy the market with one fund. The Vanguard Total Stock Market Index Fund gives you access to nearly every publicly traded company.
The Vanguard Total Stock Market Index Fund owns micro -, small -, mid-, and large-cap stocks. A few of the top 25 holdings include Apple, Amazon, Tesla, NVIDIA, Home Depot, and Netflix, each of these companies turned in stellar performances last year. The fund itself earned 21% last year and 31% in 2019. The 15-year average annual return has been 9.88%, and since 1992 it has produced an average annual return of 10.29%, outperforming the S&P 500. A $10,000 investment from 1992 is now worth $166,250.
If you’re worried about missing out on the party, consider a total stock market index fund.
January 7, 2021
Bill Parrott, CFP®, is the President and CEO of Parrott Wealth Management in Austin, Texas. Parrott Wealth Management is a fee-only, fiduciary, registered investment advisor firm. Our goal is to remove complexity, confusion, and worry from the investment and financial planning process so our clients can pursue a life of purpose. Our firm does not have an asset or fee minimum, and we work with anybody who needs financial help regardless of age, income, or asset level. PWM’s custodian is TD Ameritrade, and our annual fee starts at .5% of your assets and drops depending on the level of your assets.
Note: Investments are not guaranteed and do involve risk. Your returns may differ from those posted in this blog. PWM is not a tax advisor, nor do we give tax advice. Please consult your tax advisor for items that are specific to your situation. Options involve risk and aren’t suitable for every investor.
 YCharts. Vanguard Total Stock Market Index Fund (VTSAX), 4/27/1992 to 1/5/2021.