Our stock / investment picks
Updated September 26, 2021
These investment picks are not "sexy" and not likely to produce 100% annual returns.
Why? Investments capable of such returns are also capable of large losses and require
frequent monitoring and timely selling, something we'd like to avoid. We are aiming here for
stable, long-term growth without the need for luck and timing.
Although picks here are diversified and
safer than holding individual companies, they are based on stocks. Stocks traditionally
have periods of massive declines over 20% (like March 2020), but typically bounce back afterward.
If you don't have the stomach to hold on through such declines, you probably shouldn't invest in stocks.
Enough talk, here are the picks.
#3: Vanguard total world stock ETF (VT)
This ETF has a massive portfolio covering small-, mid- and large-cap stocks all over the
world, including developed and emerging markets. It does not include frontier markets. Vanguard is able
to pull this off with just a 0.08% expense ratio (at the time of this writing). It’s a passive, market
cap weighted fund, so over half of the assets are US stocks.
#2: Avantis small-cap value ETF (AVUV)
This ETF holds over 600 well-priced, small-cap stocks in the U.S.
This one is not index-based and is not market-cap weighted, charging an ER of 0.25% currently.
As discussed in our article on small-cap value, these
stocks have achieved superior returns over the long haul (but with a bumpier ride).
At today's valuations, it's reasonable to assume that small-cap value will outperform
in the coming decade.
#1: Vanguard total international stock ETF (VXUS)
This single ETF provides broad (market cap weighted) exposure to both developed and emerging
markets outside the US, with an expense ratio of just 0.08% at the time of writing.
This fund includes small-, mid- and large-cap businesses. Many experts believe equities
outside the US are better valued at this time. Even the most US-centric investors like Warren
Buffett are shifting money overseas. At the same time, many countries will outpace the US in GDP growth
in the coming years. While there are currency and political risks associated with international investing,
most experts expect ex-US stocks to outperform their US counterparts in the coming decade.