Key Points
Investing in ETFs is a lower-effort approach to the stock market compared to buying individual stocks.
A tech-focused ETF can help you earn above-average returns over time.
Contributing consistently over decades is key to building substantial wealth.
10 stocks we like better than Vanguard Information Technology ETF ›
Investing in the stock market is one of the most surefire ways to build life-changing wealth, and the right investment can transform your savings.
Owning an exchange-traded fund (ETF) is a fantastic way to gain exposure to high-growth stocks with minimal effort on your part. A single ETF can contain dozens or hundreds of stocks, and you'll own a stake in all of them by owning just one share of that fund.
If you're looking for a high-powered ETF with a history of earning significantly above-average returns, the Vanguard Information Technology ETF (NYSEMKT: VGT) could potentially turn just $100 per month into $2 million or more over time. Here's how.
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A simple way to invest in tech stocks
The technology sector has a long track record of outperforming the market, and investing in a tech-focused ETF -- like the Vanguard Information Technology ETF -- can make it easier to invest in these stocks without having to research dozens of individual companies.
One of this ETF's major strengths is its balance between industry-leading giants and smaller corporations. Around 44% of this fund is allocated to Nvidia, Microsoft, and Apple -- the three largest holdings by a substantial margin. But it also contains an additional 313 stocks from all corners of the technology sector.
Major companies like Nvidia, Microsoft, and Apple are often more stable than their smaller counterparts. While they can still face significant volatility during economic rough patches, they're very likely to recover and go on to see positive total returns over the long term.
Up-and-coming companies can be shakier than the industry titans, but these stocks also have more potential for explosive growth. If even one of them becomes the next tech powerhouse, investing now could set you up for substantial gains.
Building a $2 million portfolio
There are never any guarantees in the stock market, and past performance doesn't predict future returns. That said, it can sometimes be helpful to look at historical returns to get an idea of roughly how much you might earn with a particular investment.
Over the last 10 years, the Vanguard Information Technology ETF has earned an average rate of return of more than 22% per year. For context, the market itself has earned an average return of around 10% per year over the last 50 years.
[SRC] https://finance.yahoo.com/news/supercharged-vanguard-etf-could-turn-170000971.html
