2 Vanguard ETFs to Buy With $1,000 and Hold Forever

Core Insights - The article emphasizes the benefits of consistent, small daily gains in investments, illustrating that slow and steady approaches can yield significant long-term returns [1][2][5] - It contrasts the stability of Vanguard funds with the volatility of the ARK Innovation ETF, suggesting that the former is a more reliable investment choice for long-term holding [11][15] Group 1: Mathematical Proof of Daily Gains - A hypothetical scenario shows that a daily gain of 0.1% leads to a 44% increase over one year, and a staggering 3,740% over a decade [4][5] - Conversely, a daily decline of 0.1% results in a 30.6% decrease after one year, and only 2.6% of the original value remains after ten years [6][7] Group 2: Impact of Volatility - Consistent volatility, illustrated by a stock gaining 10% one day and losing 10% the next, results in a modestly negative trend over time [10] - The article highlights that while volatility may seem exciting, it imposes a negative price pressure due to frequent price swings [10] Group 3: Comparison of Investment Funds - Vanguard funds, such as the Vanguard S&P 500 ETF and Vanguard Total Stock Market ETF, are characterized by stability, with a beta value of 1.0, reflecting their performance in line with the S&P 500 [12][13] - The ARK Innovation ETF, with a beta value of 2.0, is more volatile and riskier, often doubling the S&P 500's daily movements, but has underperformed with a 3% loss over the last five years [13][15] Group 4: Investment Strategy Recommendations - Vanguard funds are recommended as foundational investments for a portfolio due to their stability and solid long-term returns of 116% and 109% over the past five years [15][16] - The ARK Innovation fund may serve as a minor holding in a diversified portfolio, but it is not recommended as a core investment strategy due to its high volatility [16]