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re: Interested in cheap ETFs, need beginner advice
Posted on 5/2/14 at 8:51 am to SomeTigerFan
Posted on 5/2/14 at 8:51 am to SomeTigerFan
If you plan on using this as a talking point in an interview, I wouldn't recommend saying that you bought "cheap" ETFs because their share price was affordable. Cheap is a measurement of P/E ratio, not a nominal dollar value.
For example, Nike is trading around $73 with a price to earning ratio of 24.97 - earning $2.93 per share. UnderArmor, on the other hand, is trading for the "cheap" price of $49.25, but it's PE ratio is 64.10 - earning only $.77 per share. Now, I'm not recommending one over the other, but by every measurement other than nominal stock price, UA is more expensive than NKE.
That being said, check out VOOG, the Vanguard Growth ETF, and VV, the Vanguard Large-cap ETF.
Additionally, the point of buying ETFs is for low-cost indexing, so if you're looking for large-cap ETFs, they are pretty much created equal outside of fees. I wouldn't be concerned with holding 2-3 ETFs that essentially track the same holdings.
For example, Nike is trading around $73 with a price to earning ratio of 24.97 - earning $2.93 per share. UnderArmor, on the other hand, is trading for the "cheap" price of $49.25, but it's PE ratio is 64.10 - earning only $.77 per share. Now, I'm not recommending one over the other, but by every measurement other than nominal stock price, UA is more expensive than NKE.
That being said, check out VOOG, the Vanguard Growth ETF, and VV, the Vanguard Large-cap ETF.
Additionally, the point of buying ETFs is for low-cost indexing, so if you're looking for large-cap ETFs, they are pretty much created equal outside of fees. I wouldn't be concerned with holding 2-3 ETFs that essentially track the same holdings.
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