Podcast

Podcast summary: expect S&P500 returns of 3-5% per year for the next 10 years; diversify with ETFs outperforming S&P 500

Investopedia Express / Podcast / Mar 8 2021 / Length: 28 mins
“Staying Grounded as Yields and Prices Rise”

This is one of my favorite investing podcasts. Informative and even entertaining.

In the recent episode, Savita Subramanian, a strategist at Bank of America, talks about what she sees in the months ahead as economies reopen.

TLDR summary – in 2021 expect

  • strong economic recovery
  • large-cap tech stocks struggling
  • SP500 too heavy with those weakening stocks
  • resulting in multiple SP500 compressions
  • SP500 end-of-year target around 3800

Key take-aways:

  • double-digit returns on SP500 are history
  • expect SP500 3-5% returns per annum for the next 10 years
  • diversify, diversify, diversify
    • be more neutral on large-cap US stocks
    • buy small-cap value stocks and expect some volatility
    • look for industrial European stocks which are less expensive

Do you agree? Let me know!

Diversification ETFs available on eToro (minimum investment of $50) beating S&P 500 year-to-date as of March 19th, 2021:

  • $VBR – Vanguard Small-Cap Value Index Fund ETF
    • VBR YTD return: 18.61%
    • Annualized Gain: 88.20%
  • $VB – Vanguard Small-Cap Index Fund ETF
    • VB YTD return: 11.67%
    • Annualized Gain: 55.30%
  • $VTV – Vanguard Value ETF VTV
    • YTD return: 9.90%
    • Annualized Gain: 46.94%
  • $VO – Vanguard Mid-Cap ETF
    • VO YTD return: 7.19%
    • Annualized Gain: 34.09%
  • $VXUS – Vanguard Total International Stock Index Fund ETF
    • VXUS YTD return: 5.42%
    • Annualized Gain: 25.69%
  • $VGK – Vanguard European Stock Index Fund ETF
    • VGK YTD return: 4.93%
    • Annualized Gain: 23.37%
  • $IEUR – iShares Core MSCI Europe ETF
    • IEUR YTD return: 5.03%
    • Annualized Gain: 23.85%

S&P 500 benchmark ETFs:

  • $VOO – Vanguard S&P 500 Index Fund ETF
    • VOO YTD return: 4.52%
    • Annualized Gain: 21.43%
  • $SPY – SPDR S&P 500 Index Fund ETF
    • SPY YTD return: 4.51%
    • Annualized Gain: 21.40%

So all of the mentioned above diversification ETFs beat the S&P 500 benchmark.

To invest a minimum of $50 into those ETFs you’ll need to:

  1. Sign up with eToro
  2. Deposit $50
  3. Pick an ETF
  4. Wait for your profit a few days / weeks / months (depending on current market conditions)

Sounds good? It is. I recommend investing into a portfolio of at least 5 ETFs.

Learn more:

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