The Vanguard Total Stock Market ETF (VTI) has become a cornerstone investment for many portfolios, particularly as the U.S. stock market continues to flirt with all-time highs. Although the allure of growth and tech stocks is strong, especially for those with a long-term investment horizon, a broader approach may prove more beneficial.
Investing in VTI offers a unique blend of diversification and a growth tilt that can prevent over-concentration in any one sector. The fund encompasses approximately 3,500 U.S. companies of all sizes, making it an ideal choice for investors looking for a buy-and-hold strategy. With a remarkably low expense ratio of just 0.03%, VTI is an attractive option for those who want to let the power of long-term compounding work in their favor.
Currently priced at around $336.31, VTI has shown a slight increase of 0.31%, reflecting ongoing market interest. The ETF’s day range recorded values between $334.60 and $337.74, and it has traded up to 5.2 million shares on this day. With a 52-week range extending from $236.42 to $340.32, VTI’s performance highlights its resilience and potential.
While large-cap investments, such as the Vanguard S&P 500 ETF (VOO), are common in cornerstone portfolios, VTI can offer advantages thanks to its all-cap exposure. Mid-cap and small-cap stocks have been underperformers recently, but they come with the potential for improved returns over time. Their distinct market dynamics can even help reduce overall portfolio risk, making them a vital component of a balanced investment strategy.
Additionally, a notable shift away from tech sectors has raised questions about the sustainability of the prolonged tech/growth rally that has persisted for nearly three years. While some investors remain committed to this sector, diversifying into sectors like financials, healthcare, and industrials may yield fresh opportunities for growth. VTI’s allocation includes around 25% towards smaller companies, positioning it to capture upside potential outside the tech-heavy indices.
In summary, with $100,000 to invest, VTI emerges as a compelling option. Its extensive diversification and the inclusion of small-cap stocks create a strategy poised for long-term growth. As the investment landscape evolves, VTI offers a balanced approach that could mitigate risks while still looking for value opportunities.
