How Would Spider-Man Invest? [Avengers Endgame Explains Investing] - YouTube

Channel: Let's Talk Money! with Joseph Hogue, CFA

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Peter Parker鈥檚 worries have exploded ten-fold since that radioactive spider turned him into
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everyone鈥檚 favorite neighborhood spiderman.
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Saving the universe in Avengers Endgame probably doesn鈥檛 give him much time to manage his
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money and invest so we鈥檙e putting together a simple five-fund portfolio all you super
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heroes can use for a stress-free investing strategy.
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We鈥檙e talking easy index investing today on Let鈥檚 Talk Money.
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Beat debt.
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Make money.
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Make your money work for you.
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Creating the financial future you deserve.
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Let's Talk Money.
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Joseph Hogue with the Let鈥檚 Talk Money channel here on YouTube I want to send a special shout
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out to everyone in our community, thank you for taking a part of your day to be with us.
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If you鈥檙e not part of the community yet, just click that little red subscribe button.
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It鈥檚 free and you鈥檒l never miss an episode.
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Spiderman was by far my favorite super-hero growing up and I鈥檝e been a fanboy since
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1984.
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The socially awkward Peter Parker turned friendly neighborhood spider gave us bookworms a lot
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to root for.
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Now the one-year wait to Avengers Endgame gave me a lot of time to think, what about
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the daily lives of our favorite costumed characters?
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What are they doing with their money and what might the Avengers invest in when they鈥檙e
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not fighting universe-ending bad guys?
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But Peter always seemed to have the most neurotic and stressful life.
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From never making enough money as a photographer to protecting loved ones and the tough relationship
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with Mary Jane Watson, Peter always had way plenty to worry about so I鈥檓 thinking Spiderman
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would opt for a stress-free way to grow his dough.
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For that, I鈥檓 putting together a simple, stress-free portfolio of just five funds.
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This strategy will give our web-slinger all the diversification he needs in three different
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assets from stocks and bonds to real estate.
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He鈥檒l get a great dividend yield and won鈥檛 have to worry about a stock market crash while
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fighting the Sinister Six.
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That鈥檚 a reference for the true fanboys out there.
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I鈥檒l be using Vanguard index funds for the portfolio because the company offers some
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of the lowest cost options available.
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The funds we鈥檒l be using will give you access to thousands of stocks, bonds and real estate
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companies for less than 0.12% a year.
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That means an expense of less than $12 a year on a portfolio of $10,000 dollars.
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I鈥檝e got no affiliation with Vanguard and I get no commissions from recommending the
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funds.
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I鈥檝e invested in them myself and recommended them to private wealth clients throughout
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my career.
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The first Vanguard index fund in our portfolio is the Dividend Appreciation ETF, ticker VIG.
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The fund holds shares of 182 companies across sectors, some of the largest companies in
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the market like Microsoft, Walmart and McDonalds.
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The VIG pays a 2% dividend yield which is only a little above the market but is balanced
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by solid price growth.
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Over the last decade, the fund has produced an 11.2% annual return which is one of the
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highest among the Vanguard funds.
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It also gives you better exposure to some of those safety sectors like consumer goods
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and services so it鈥檚 not nearly as overweight in tech or the other sectors you usually find
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in a growth fund.
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That exposure to safety stocks is important whether the stock market tumbles or you鈥檙e
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fighting Thanos for the fate of the univers.
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Our next fund is going to compliment the dividend fund so we get a little more growth.
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Here we have the Vanguard Mega Cap Growth ETF, ticker MGK.
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This fund holds shares of 120 companies and has produced a 13.7% annual return over the
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last decade.
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The dividend yield here is only 1.4% because the focus is really on stocks that grow faster
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rather than returning cash to shareholders.
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The sectors here are weighted to growth, so you鈥檝e got more in technology and financials
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and health care compared to the dividend fund.
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I really like the combination here from the two Vanguard funds because you get solid dividends
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and price growth.
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Investing in the two funds gives you a more balanced investment across sectors versus
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just investing in the broader market index funds.
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Now a lot of investors avoid international stocks and think they get all the exposure
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they need from those large U.S. companies.
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They鈥檙e missing out on a huge opportunity for higher dividends and less risk though.
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Investing directly in international companies takes a lot of the risk from the U.S. dollar
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and other economic problems.
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Any company based in the U.S. is going to be exposed to these even if it has a lot of
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foreign cash flow so you really need to have at least one international stock fund in your
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portfolio.
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For that, I鈥檓 going to suggest the Vanguard International High Dividend Yield ETF, ticker
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VYMI.
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The fund holds shares in over 900 international companies and pays a healthy 4% dividend yield.
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What I like about the fund, besides the solid dividend and average 9.7% annual return since
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inception, is the ability to get exposure to fast-growing emerging markets as well as
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developed markets around the world.
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The fund has half its exposure to relatively safe companies in Europe but also 20% in EM
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stocks and Asian growth.
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Just those three Vanguard funds will give you all the stock exposure you need.
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Now how much you have in these is going to depend on things like your age and investing
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goals.
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Most people will want between half to 65% of their portfolio in stocks but don鈥檛 neglect
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the bonds and real estate funds we鈥檒l get to next.
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These two funds for bonds and real estate are going to smooth out your risk in stocks,
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provide some great cash flow and even give you the opportunity to take advantage of lower
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prices when the next stock market crash does hit.
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For the bond part of our portfolio, we have the Vanguard Long-term Bond ETF or ticker
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BLV.
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Now bonds got smashed last year on the increase in interest rates but have rebounded in 2019
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and are actually beating stocks over the six-month period.
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The fund pays a 4% dividend and has 42% of more than 2,000 bonds held in U.S. government
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debt.
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All the bonds are investment grade so extremely safe credit ratings.
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Our real estate fund here is my favorite, the Vanguard Real Estate ETF, ticker VNQ.
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Real estate is another sector that got hit on rising rates last year but the fund has
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held up and pays a 4.4% dividend yield.
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There鈥檚 no better asset than real estate for creating wealth.
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We鈥檝e got another video on the channel covering the seven real estate strategies I used after
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getting out of the Marine Corps to get started with no money down.
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The problem is that even without having to come up with tens of thousands down, property
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investing can still be a lot of time and work.
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REITs are a great opportunity to get that growth and cash flow without all the work.
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The Vanguard real estate fund has produced an 8.4% annual return since its inception
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in 2004 and holds shares of 184 real estate companies.
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This is a must-own fund for its diversification in every property type and in every region.
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That鈥檚 it.
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Just five investments and our favorite Marvel super hero has entire portfolio worked out.
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Spiderman can sit back, put a little money to his investments each month and dream of
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spinning webs with Mary Jane.
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If he鈥檚 using M1 Finance, the investing site I鈥檓 using for our 2019 stock market
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challenge, he鈥檒l also save hundreds a year on fees and watch his money grow faster.
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M1 Finance is a no-cost investing site with some great features so I鈥檒l leave a link
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in the video description to learn more.
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We鈥檙e doing a whole series on Avengers Endgame investing from Captain Marvel to Iron Man,
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SpiderMan and the Black Panther.
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I鈥檒l leave a link in the video description below but be sure to click that little red
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subscribe button so you don鈥檛 miss a video.
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We鈥檙e here Mondays, Wednesdays and Fridays with the best videos on beating debt, making
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more money and making your money work for you.
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If you鈥檝e got a question about money, just scroll down and ask it in the comments and
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we鈥檒l answer it in a video.