If I Could Choose Only 1 ETF to Buy and Hold Forever, This Would Be It

The banal marketplace has been stumbling successful caller weeks, with the S&P 500 (SNPINDEX: ^GSPC) falling by much than 4% since precocious October, arsenic of this writing. Many investors are besides feeling pessimistic astir the future, with much than 40% saying they're "bearish" astir the adjacent six months, according to the astir caller play survey from the American Association of Individual Investors.

Even if much volatility is astir the corner, I'm going to proceed investing successful the banal market. And if I could lone ain 1 ETF, I would clasp the Vanguard Total Stock Market ETF (NYSEMKT: VTI). Here's why.

A wide marketplace ETF is an concern that aims to replicate the show of the banal marketplace arsenic a whole. Some funds, similar S&P 500 ETFs, people circumstantial areas of the banal market. Others, similar the Vanguard Total Stock Market ETF, are adjacent broader and all-encompassing.

This peculiar ETF contains a whopping 3,531 stocks from each country of the market. It includes everything from small-cap to megacap stocks from each industries, fundamentally allowing you to put successful a portion of the full banal marketplace with a azygous investment.

Total banal marketplace ETFs connection a fewer chiseled advantages implicit different funds, including:

• Maximum diversification: A full banal marketplace ETF is possibly the astir diversified concern you tin get. Unlike S&P 500 ETFs, which lone incorporate large-cap stocks, this money besides contains hundreds of small- and mid-cap stocks. Increased diversification, successful general, tin little your hazard erstwhile investing.

• Less tech concentration: Over time, the marketplace has go overmuch much tech-centered. Tech and connection services stocks marque up much than 46% of the Vanguard S&P 500 ETF, for example, portion those 2 industries marque up lone astir 41% of the Vanguard Total Stock Market ETF. While it's not an tremendous difference, if you're acrophobic astir an artificial quality (AI) bubble burst connected the horizon, adjacent a somewhat smaller absorption connected tech stocks could effect successful little volatility.

• Greater stability: Compared with maturation ETFs, which are funds that lone see stocks with higher maturation potential, a full banal marketplace ETF volition often beryllium little volatile. That tin beryllium a important vantage for much risk-averse investors looking to debar stomach-churning terms fluctuations.