Can You Invest in Index Funds on Robinhood
The Wisdom of Crowds gained widespread attention when information technology was published 17 years ago. In the book, author James Surowiecki laid out the case that "the many are smarter than the few."
To exist sure, there are enough of times when the crowd isn't all that wise. However, Surowiecki'south point is often spot-on.
Take, for example, Robinhood's 100 most pop list. It includes the stocks nearly widely held by investors on the trading platform. Some of those stocks aren't neat alternatives, in my view. Notwithstanding, quite a few are.
And there are some stocks on the summit 100 list that are absolutely brilliant picks. I think that buying these three popular Robinhood stocks could even be the smartest investing moves you lot'll ever make.
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Vanguard S&P 500 Index Fund ETF
OK, theVanguard S&P 500 Index Fund ETF (NYSEMKT:VOO) really isn't a stock. However, it is securely ensconced on the Robinhood top 100 list. Since substitution-traded funds (ETFs) trade like stocks, I personally don't have any issues with VOO (I'll use its ticker symbol instead of its rather lengthy full proper name) being treated past the folks at Robinhood every bit a stock.
Investing in an S&P 500 index fund like VOO truly is one of the smartest fiscal moves you lot can make if y'all hold information technology over the long run. The Southward&P 500 has never lost money over a twenty-year menstruum. Information technology has delivered an average annualized return of shut to 10%. That rate means that y'all can double your money every seven or so years.
Warren Buffett, one of the best investors the earth has seen, really likes S&P 500 alphabetize funds. He even revealed several years ago that his will directs that xc% of the money inherited by his family when he dies be invested in a depression-price S&P 500 alphabetize fund.
VOO's almanac expense ratio is a super-low 0.03%. You won't find an S&P 500 alphabetize ETF with a lower price. Investing in VOO should make you lot solid returns over the long term.
Amazon.com
Information technology's not surprising that lots of Robinhood investors like (and own shares of)Amazon.com (NASDAQ:AMZN). The internet giant ranks as the third-largest company in the globe based on market cap. Amazon is a household proper name. And its stock has been a huge winner, soaring more than than 1,500% in the last decade lonely.
Buying shares of Amazon for what information technology'south done in the past isn't a smart motility, only doing so because of it could exercise in the hereafter is. I especially like Amazon because -- like a great football team -- information technology plays both offense and defence really well.
From a defensive standpoint, Amazon is nigh as strong as they come up. The visitor's moat is formidable. It's highly unlikely that any rival will exist able to topple Amazon's advantages in eastward-commerce.
What most Amazon's offense (i.eastward., growth opportunities)? Information technology even so has tremendous prospects in due east-commerce and cloud hosting. Amazon is expanding rapidly into healthcare. My Motley Fool colleague Sean Williams predicts that the stock could hit $10,000 past 2025 -- nearly three times college than its current share price.
I don't think that'south far-fetched. Even if Amazon doesn't evangelize such an outsized gain, my view is that buying the stock is still ane of the smartest moves y'all can make right now.
NVIDIA
While Amazon's share price has soared over the terminal x years, the stock doesn't hold a candle toNVIDIA (NASDAQ:NVDA). Shares of the graphics scrap maker have skyrocketed nearly five,000% during the period.
Are NVIDIA's growth days over? Non at all. Its market cap currently stands at a little over $500 million. I wouldn't be surprised if NVIDIA becomes the next $1 trillion company.
My enthusiasm about NVIDIA stems from the company's leadership in iii hot growth areas. The least of these (based on the current fiscal impact for NVIDIA) is cryptocurrency mining. The most important (again, based on its current financial impact) is gaming. NVIDIA's graphics processing units (GPUs) are highly prized by gamers.
Nonetheless, I doubtable that NVIDIA's expertise in artificial intelligence (AI) could exist the biggest catalyst for the stock over the long term. NVIDIA's GPUs are already widely used in data centers, particularly in powering AI applications. My accept is that buying NVIDIA stock now and holding for at least 10 years will look like a genius conclusion in hindsight.
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Source: https://www.fool.com/investing/2021/07/04/buying-these-3-robinhood-stocks-could-be-the-smart/
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