The 7 Best Stable ETFs for Beginners Over 40

So, you're over 40 and you're trying to catch up with investing. However, you're trying to figure out what is the best ETF to purchase first because you are looking for something that's more stable that can act as a backbone ETF in your portfolio. You don't want anything too crazy, anything too volatile. Well, this is going to be the perfect video for you. I'm going to walk you through the seven top popular ETFs that beginners usually will gravitate towards when it comes to building their first portfolio. and I'm going to go through the five-step criteria that I go through myself and my community members also go through to choose their ETFs. Okay. Now, if you don't know who I am, my name is Steve. I used to be a public school teacher and now I teach personal finance online. And my goal is to help anyone here on the YouTube space to catch up with investing and how you can do it by yourself and that you don't need a money manager or anyone else to invest for you. Now, if you haven't done so already, you can download my study guide here, and I linked everything down below in my $1 million investing road map. If you don't want to download it, that's okay, too. You can just take a screenshot of this. But essentially, this is the criteria that I follow for myself and that all my other community members, all my coaches use. So, when you are choosing an ETF, you generally want to look for these five things. First, you want to make sure that the ETF is trending upwards in the one-year, 5year, and 10year charts. Two, you want to make sure that the performance in the 1, 5, and 10 year is between around 7 to 12% per year or a little bit more, that's okay, too. The third, the expense ratio should be less than 0.50%. Anything higher, that means that you're most likely overpaying on your funds, and it's going to compound to a lot of fees later on. And so you want to make sure that you catch that upfront when you start investing as a beginner. Fourth, you want to make sure that the dividend yield is roughly between 050 and 4%, anything higher, there is a risk that the actual ETF itself may be declining over time. And anything lower than 050%, it may suggest that there's a little bit more volatility in the ETF. Okay. And then the fifth criteria is that you want to make sure that you are holding strong companies that are not some sort of penny stocks, IPOs, meme stocks, any themed ETFs. Those are the ones that I don't like. I know there are ETFs out there that track K-pop companies or there's another ETF that tracks dog companies. So we want to primarily focus on as our first beginner ETFs focus on the companies that are actually producing money that they have sticky businesses products and services that other people want to use and not just themed ETFs. I mean if you want to explore later on you can go for it but again if you are a beginner you generally want to stick with the blue chip value companies primarily in the overall S&P 500 index or the NASDAQ or the Dow Jones Industrial Average. Okay, if you don't know what that means I'll talk about it in a little bit. But again, hey, this is not financial advice. Again, you want to make sure that you choose whatever ETF that you feel most comfortable with because remember, you are in charge of your financial journey. You are in charge of your own money. So, let's put this criteria into action. So, the very first thing that I want you to do is you want to go to Yahoo Finance. So, this is where a lot of my community members will do their research. It's very easy to use. So, you type in Yahoo Finance, you go here, and let's take a look at the very first ETF. This is one of my very favorite ones. This is SPYM. So, this is an ETF that tracks the S&P 500. It's relatively cheaper per share. Right now, it's currently trading around $86 $87 per share. And because this is an S&P 500 ETF, it tracks the top 500 companies in the United States like Amazon, Alphabet, Google, Nvidia. I'm going to show you all the companies within this ETF in a little bit and how you can check it yourself. But, let's take a look at the one-year performance of the chart. So, we're going to go to criteria number one here. We're going to check the 1-year, 5year, and 10-year charts. So, one year, good. It's pretty good. We had around a 20% gain. It's trending higher. 5 years, it's also trending higher. Even though there's been a lot of these roller coaster dips, which is absolutely normal in the stock market. You don't need to freak out or anything, okay? It's just part of being an investor. And if you take a look at the 10 plus year chart, that's pretty good, too. It's an upward trending trajectory. What's the second criteria? Okay. Then we need to check the performance and to see if it's roughly between 7 to 12% per year within the 1 year, 5 year, and 10-year performance time period. If it's a little bit more, that's okay, too. So, we can go to Yahoo Finance and on the left, you can click on the button where it says performance. When you go there, scroll down, you can see, okay, the one-year performance was 29.75% last year, which is pretty good. We had a pretty strong year. 5 years we had a little bit more of a return to our means which means that we had around a 14% average annual return not just over the last 5 years but annually 14% 14% 14% so on and so forth and then over the last 10 years it's around also around 14 15 16%. Which is good. Awesome. Checks that off. What's the next thing? Okay. We want to make sure that the expense ratio is less than 050%. So, if we go back to summary right here and we go down underneath the chart, we can see the expense ratio. What does the expense ratio say? Okay, it says it's 0.02%. Which means that you just have to pay 2 cents for every $100 invested, which is very, very cheap. This is compared to if you were to give your money to a money manager, they would charge you around $1 to $2. here you would just pay 2 cents for every $100, right? Big difference here. This is why a lot of people when they give their money to a money manager, they just end up paying a whole bunch of fees that are on the unnecessary side. Okay? So, I'm here teaching you how you can invest yourself. So, you don't need a money manager. Okay, great. So, it's under 050%, right? It's 0.20% check. It checks off our criteria here. Let's take a look at the fourth criteria. Is the dividend yield between 050 and 4%. The answer is yes, it is. It is right here. The dividend yield.99% or around 1%. That's pretty good. This means that you get paid around 99 for every $100 you invest per year. Okay, so very close to a dollar for every $100 for the entire year. Okay, so good. Let's take a look at the fifth criterion. Does it hold strong companies and stay away from these penny stocks and all these crazy stocks here? Okay, let's take a look. If we go to the performance or the holdings here, right on the very left hand side, you can see all the companies or or the top 10 holdings of this fund. So we can see that there's Nvidia, Apple, Microsoft Amazon Alphabet Google and the percentage of these stocks that make up the fund. So you can see that Nvidia takes up around 7.8 7.9% of this fund at the time of this recording. Around 7% of this fund is Apple. Around 5.14% is Microsoft. And then so on and so forth. Okay, sound good. So this is SPYM. I like this. This is what I invest in myself. You don't have to invest in it. Okay, so you just invest in whatever you're comfortable with. So that's ETF number one. What's the second most popular backbone stable ETF? Well, I also like V. This is a community favorite of mine. A lot of my community members love investing in VO. A lot of friends and other family members, they all invest in VO. I love VO. It's great. So V is a little bit different than SP YM in a sense where while one share is a little bit on the pricier side. It's around 675 cents per share. Doesn't mean that it's quote unquote, you know, like it's worse than SPYN because it's more expensive. It has nothing to do with that. It just means that per share it's a little bit on the higher side, but the performance is still roughly the same. Why? Because it still tracks the S snp 500. You're going to see a lot of similarities to SPYM, which I just talked about in a little bit. But let's take a look at VO. If we take a look at the one-year chart, ah, looks very similar to SPYM. Awesome. 5-year chart, also going up. All yes, it's also going up. Perfect. We take a look down. What's the dividend yield? 1.03%. A little bit higher than SPYN, but it's pretty much the same thing. And the expense ratio, yes, it is slightly higher. It's 03%. meaning that you pay three cents for every $100 invested. I already know someone in here is going to ask, "How do I pay for these fees?" It's automatically taken out of your brokerage account. So, you don't have to lift a finger. Everything is all automated. Okay? So, you don't have to panic or anything like that. So, let's take a look at the performance. The performance, let's see if it's between 7 to 12%. Oh, okay. Yes, it is because it's the same thing as SPYM. It holds the same companies. You can see that over the last one year around 29 30% 5 years 14% 10 years 15% very similar pretty much the same thing as spym if we take a look at the holdings let's see same thing you can see that Nvidia takes up around 7.89% Apple 7.04 Microsoft Amazon very similar let's take a look at spym again ah you see how it's pretty much the same 7.89% right even for Apple 7.04 here over here it's 7.05 05 01% difference. It's not that big of a difference, right? It's pretty much the same thing. So, this is V, another alternative to an S&P 500 fund if you want to invest in the top 500 companies in the United States. What's another one? Well, here is SCB. Now, with SCB, same thing. We can take a look one-year chart upward, 5-year chart upward, all upward. So, this is from not Vanguard. So, V is from Vanguard. SPYM is from State Street, okay? It's just from different brokerages, from different institutions, different companies. So, this is made from Schwab. Every company will make their own ETF. It's the same thing. It's kind of like Toyota making their Camry or Honda making their Accord. The Camry and Accord, even though they're not exactly the same car, but they're pretty much the same thing. Okay? Have a driving wheel, very similar engine. They're competitors of each other. So, it's the same thing here. They just package it with the same things inside the fund. Okay, so SCHP, awesome. We can take a look at the expense ratio. 03%. Very good. Dividend yield 1.01%. Awesome. I like that. Let's take a look at the performance. Performance, it's still the same thing. It's no surprise here. Around 29% over the last year. 12 13% for the last 5 years. And then also around 15% average annual returns over the last 10 years. Awesome. Now, let's take a look at the holdings. very similar. You can see that Nvidia is still taking up around 7% right over here. It's a little bit more though. So just take note of that. You see how this is 7.89% in V. Over here in SCB it's 7%. So you want to see yourself what makes more sense for you. If you don't want to go that heavy into Nvidia or Apple, then you can go invest into something like SCB. If you are very bullish in companies like Nvidia, Apple, Microsoft, then sure, then you can go into a V or SPYM. Okay, let's take a look at the next ETF here. Oh, and by the way, SCP, if you are looking for something that is on the cheaper per share price, you know, if you're looking for something that's a little bit cheaper there, it's only $28 per share. Okay, $28 compared to Vanguard's $675. Okay, now I know some of you are thinking, "Can I still invest in VO if I don't have $675?" The answer is yes. Some brokerages will allow you to purchase fractional shares, so you can buy half of VO or maybe a quarter of VO. I'll do another video in the future about fractional shares and how you can purchase fractional shares. So, you can stay tuned. Now, let's take a look at the fourth popular stable backbone ETF, which is VTI, which is the Vanguard Total Stock Market Index Fund. Now, VTI is a little bit different, which I'll explain in a little bit. Now, for this one right here, one-year chart, pretty much the same thing. Good. Upward trending, five years. Good. All good. It's all upward trending. Let's take a look at the dividend yield. Still 1%. No surprise there. Expense ratio still that low 03%. And if we take a look at the holdings now, you notice how the holdings are slightly different now, or the percentage is a little bit different. It's still going to be Nvidia Apple Microsoft Amazon Google, all these institutional buyers of Wall Street investors. They really like these companies right now, which is why they have all of these companies in all of these funds, right? They're all mirroring each other. Now, if we take a look though, there is only 6.7% of Nvidia in VTI compared to something like SPYM where it's 7.89%. So, it's heavier in this fund right here. Okay. So if you want to go a little bit lighter on Nvidia, Apple, then you can go for VTI. Okay. And then same thing with the performance. Performance is similar compared to the other ones. 1 year 29%, 5 years, 12%, and then 10 years 15%. Awesome. But what's different with VTI? Well, if you go to Google, right, you can do this yourself. I want to teach you how you can have autonomy yourself and how you can research yourself. How many stocks are in VTI? BTI holds not just 500 companies like SPYM or VO. It holds around 3,500 companies. Now, just remember the waiting of the top companies here are still going to be Nvidia and you know Microsoft, Amazon, all those companies, but just be aware that you're also going to be investing in these other smaller companies along with VTI. Okay, if this is something that you choose for your first Backbone stable ETF. All right. Now, what is the fifth ETF? This is going to be VET. This is the Vanguard Total World Stock Index Fund. All right, very similar. Take a look at the one-year. Okay, upward trending. 5-year. All awesome. Upward trending. I love it. If you take a look at the yield, ah, look at the yield this time. The yield is a little bit higher. It's 1.59%. And the expense ratio, it is a little bit higher now. It's 06%, not 03, not 02. If we take a look at the performance we can see that for the last year 30% uh it's a little bit higher. Okay, not still the same thing though, right? 5 years 11.23% and then 10 years 12 13%. So it's a little bit lower. Okay, so it performed a little bit higher recently but it was a little bit lower in the last 5 to 10 years compared to the other ETFs. Now let's take a look at the holdings. Holdings similar but what do you notice that is different? Now you see Nvidia is now 4.2% of this fund. Not 7%, not 6%, 4%. Right? Apple is around 3.82%. Microsoft is around 2.84%. So the percentages, the waiting is a little bit lighter for VT. So if we take a look at VT, remember how I said VTI holds around 3,500 companies? Well, what about VT? Let's take a look. VT. Ah, now you're investing in 10,000 companies, more than 10,000 companies. So, if this is what you want to invest in, then VT is going to be a good option for you. And if we take a look at how much it is per price, it's around $154, right? Compared to VT, which is around $363 if you want to go for something cheaper. SHB is $28 per share. SPYM, still on the cheaper side, $86, right? Most expensive one right now currently $675 for VO. All right. Okay. What is the next popular ETF? Well, there is also RSP. This is not from Vanguard or State Street or Schwab or Fidelity. This is from Invesco. Now, this one right here is the S&P 500 equal weight ETF where you're going to see in a little bit the companies are not so much into Nvidia and all these other companies, tech companies that I just talked about. Let's take a look at the one-year chart. Okay, it's going upwards five years. Awesome. And in the last 10 plus years, awesome upward trending ETF. That's what we want. Dividend yield a little bit higher than before, right? 1.49% compared to just 0.99 or 1%. The expense ratio, however, is a little bit on the higher side relative to what we've already looked at. This is20%. So now you're paying 20 cents per $100. Now let's take a look at the performance. Performance is going to be a little bit different. Over the last year, it wasn't around 30%, 29%. Now, it dropped down to around 20%. Five years, 8.45%. Okay, that's pretty good. It's still between the what, 7 to 12% range here, right? That's what we're looking for. And if we take a look at the last 10 years, around 12%. Awesome. If we take a look at the actual holdings though, right, click on holdings. You see the composition is much different compared to the other funds. Here you can see that there's Dell, right? There's SanDisk, there's AMD, there's Intel, Micron, right? All of these companies here that you didn't see as the top companies in the other funds. So, if you want to kind of spread things out a little bit more evenly, then you can invest in something like Invesco's S&P 500 RSP. One share currently is around $210. All right. Okay. Now, here is another one, another option. If you are someone who says, I don't want to invest just in the United States. I want to invest maybe somewhere outside of the United States, maybe like an international stock. Then there is this option, Vanguard's VXUS. This is super popular in the investing world. It's around $84 per share right now. And if we take a look at the one-year, okay, pretty good upward trending. 5 years upward trending and in all upward trending. Okay, of course I already know that's upward trending. I already did all the research, all the homework for you. If we take a look at the dividend yield, ah much different than before. You see how the dividend yield is not 1%, it's now 2.66%. And the expense ratio still pretty good. It's around 0.05%. Meaning that you pay 5 cents for every $100 invested. Let's take a look at the performance though. Performance is going to be a little bit different because in the last year, ah, this one actually performed the highest compared to the S&P 500. It had an average annual return of around 32 33%. Last 5 years, not so much. It's been a little bit on the slower side around 8.75% which is still not bad because it still falls between 7 to 12%. And also the last 10 years around 9.88% average annual returns pretty good. However, if we take a look at the holdings very different compared to what we saw in VCHB all the other ones we can see that here it invests in these other international companies outside of the US like Taiwanese semiconductor right Samsung 10ense. So if you are someone who wants to diversify outside. So maybe you want to do a combination of investing in the US and outside internationally then you can do a combination of say spym and VXUS or V and VXUS whatever it is that you choose to do. All right. Now if this is so complicated for you it's totally fine. I actually put together this sheets right here where you can compare everything here. where I did a comparison of the S&P 500 funds, tech and growth funds, high dividend paying funds. For the tech and growth funds and high dividend paying funds, I'm going to make a individual video for this in the next couple of weeks or so. So stay tuned. And I also do an overall ETF comparison here so you can see what it is that fits your own risk tolerance. And I also categorize everything by expense ratio. Now, if you're someone who hasn't downloaded my $1 million investing road map, all my resources are right here. They're just down below. You can download it. You're going to get access to all of my study guides, resources. Everything is free here. My sheets, my ebooks, my YouTube lessons, everything is free for you here. My whole goal is I want to make you a good investor for yourself and I want to help you catch up with investing, especially if you're over 40 because this is the perfect time for you to start now. Your income is high, you still have time to invest, you have a long runway, like this is the best time to compound your wealth. If you are someone with more than $50,000 where you want to get started with investing, and I know this is a larger sum of money, and you're probably intimidated on what you need to do, you can always get my investing road map. And on the form, if you say that you have more than 50,000, you want to start right now, you live in the US, then you can join my 5day investing challenge, which looks like this right here. And you get access to all of my videos here, my quizzes, all my resources, all for free. only if you have more than $50,000 and you want to get started right away. I'm only helping these people with more than $50,000 because you have the highest risk. What is that risk? It's inflation risk because you don't want to just leave it in a low interest bank like in a checking account or in a savings account. You want to make sure that you start growing it so that your buying power doesn't decrease over time. And when you get this investing strategy course right here, paid investing strategy course, the 5-day challenge, you not only get the videos, the quizzes, the resources, you also get to ask me questions within the community. You can type in your questions. I'll be there answering them or my team and I will be doing that. And on top of that, you'll be able to join my live streams, my private live streams that I host every Thursday as of now. It might change later on. So, if you want to have an intimate group with me and a couple of other people, like maybe other 10 or 15, 20 people, you can join. Just download the investing road map. Just say that you have more than $50,000. But you want to be truthful though, otherwise it's not going to help you. And you can join for free. Everything, all of this is 100% free. If you are still in need of help though, even with all the videos, quizzes, resources, chatting, live streams, the talks with me, I will even have you I can even invite you to a one-on-one strategy call with either me or a team member and we may potentially invite you to our one-on-one coaching program for our paid accelerator coaching program if this is something that you're interested in. Okay, so let me know if you have any questions. If you are already investing in a specific stable backbone ETF, let me know in the comments. And yeah, I hope this video helps and I will see you all in the next one.