Ultimate Investing Portfolio 2025: Best Number of ETFs You Should Hold TOTAL

Summary

The video by Professor G, known as "Investing Simplified," focuses on the optimal number of ETFs (Exchange-Traded Funds) for a 2025 investment portfolio. He emphasizes the importance of a diversified and simplified portfolio to minimize risk and maximize potential returns. The video guides viewers through selecting foundational ETFs, sector-specific ETFs, and tools for analyzing fund overlap, arguing that investors should ideally hold between one to five ETFs to avoid redundancy and complexity while maintaining effective diversification.

Highlights

• Professor G advises against holding too many ETFs to avoid redundancy. 🎯
• He suggests using tools to analyze fund overlap and enhance portfolio efficiency. 🔧
• The video includes a segment promoting Trade, a coffee subscription service. ☕️
• Investors are encouraged to hold a balanced mix of foundational, sector-specific, and higher risk ETFs. ⚖️
• Professor G explains why having a simpler portfolio reduces anxiety and increases investment confidence. 😊

Key Takeaways

• Diversify your portfolio with a mix of ETFs to balance risk and return. 📈
• Use the ETF Research Center tool to check fund overlap and avoid redundancy. 🔍
• Aim to keep your ETF portfolio between one to five funds for simplicity and effectiveness. ➡️
• Consider different types of ETFs: foundational, sector-specific, and high-risk/high-reward. 🏦
• Investing in international ETFs can be risky and may not always yield the best returns compared to US funds. 🌍

Overview

Professor G, through his channel "Investing Simplified," is on a mission to guide investors on constructing the ultimate ETF portfolio for 2025. He dives into the world of ETFs, explaining why an S&P 500 or total US stock market ETF should serve as the bedrock for most portfolios. These foundational ETFs offer broad market exposure with relatively low fees, capturing the essence of the stock market's average performance. He's a fan of simplifying investing strategies, making them accessible and less intimidating.

For those eager to beat the average market returns, Professor G recommends exploring sector-specific or high-growth ETFs. These specialized ETFs, though presenting higher risk, promise higher returns. However, he stresses the importance of evaluating potential fund overlaps using tools like ETFresearchcenter.com. This step ensures that investors aren't unknowingly doubling down on the same assets, thus maintaining a balanced investment approach.

Overall, the emphasis is on keeping portfolios lean and mean. Professor G critiques portfolios with excessive funds, highlighting that simplicity often yields better management and less stress. Most investors, he suggests, should limit themselves to five ETFs, focusing on a mix of foundational stability, lucrative growth potential, and targeted sector exposure. With a lighter load, investors can approach their financial goals with more clarity and confidence.

Chapters

• 00:00 - 01:30: Introduction to ETFs The introduction to ETFs discusses the performance and attractiveness of ETFs compared to the S&P 500 index. The S&P 500 is highlighted as a historically successful index with a return rate of over 10%. However, some ETFs have outperformed this average with returns of around 18% over a decade. The chapter raises questions about the optimal number of ETFs to include in an investment portfolio and the purpose of ETFs, noting that some are designed for safety and stability, offering steadiness when the broader stock market declines.
• 01:30 - 03:00: Foundational ETFs The chapter discusses the various types of ETFs (Exchange-Traded Funds) that one can include in a portfolio to diversify and customize it. It mentions specialty sector and style ETFs that focus on specific areas such as Bitcoin, AI, and healthcare. Additionally, the chapter highlights the presence of bond and international ETFs that contribute to overall portfolio diversification. Despite the multitude of solid ETF choices available, the chapter raises the question of how many of these ETFs one should hold in their portfolio.
• 03:00 - 04:30: Choosing Sector and Specialty ETFs The chapter focuses on investing in sector and specialty ETFs, highlighting the importance of having a solid US-based ETF with low fees as a foundation in one's portfolio. It discusses the benefits of ETFs that track the S&P 500 or the total US stock market index, noting their similar long-term returns and market average representation.
• 04:30 - 06:00: Exploring Fund Overlap with Tools The chapter titled 'Exploring Fund Overlap with Tools' discusses the various options available for investing in the S&P 500 through ETFs and mutual funds. It compares ETFs like VU, SPY, IVV, and SPLG, alongside mutual funds such as FXAIX at Fidelity, SWPPX at Schwab, and VFAX at Vanguard. Each of these options tracks the S&P 500, representing America's top 500 companies by market capitalization. The chapter highlights that the primary difference between these investment options is the fee, which typically remains under 0.3%.
• 06:00 - 07:30: Details on Fund Overlap and Portfolio Selection The chapter titled 'Details on Fund Overlap and Portfolio Selection' discusses options for investing in the total US stock market index. It highlights various funds, including ETFs and mutual funds offered by major investment companies like Vanguard, Fidelity, and Charles Schwab. The specific funds mentioned are VTI (ETF), VTSAX (mutual fund), FSK AX, and SWTSX. The chapter emphasizes that these funds provide similar returns with slight differences in fees, and suggests choosing one of these as the foundational element of an investment portfolio.
• 07:30 - 09:00: Case Study: Fund Overlap Analysis The chapter discusses the importance of having a strong foundation for an investment portfolio, similar to building a house with a strong foundation. It suggests considering AI advancements or energy ETFs (exchange-traded funds) for utilities to add safety and stability. Recommendations include evaluating different sector or specialty ETFs by examining their statistics and the companies within them to make informed investment decisions.
• 09:00 - 10:30: International and High Risk ETFs The chapter discusses International and High Risk ETFs, beginning with an example of XLE for energy, which showed a 1.45% increase for the year despite a declining market. It highlights the importance of checking ETF statistics, such as expense ratios, historical performance, and holdings percentages. The chapter suggests that historically, energy ETFs have been a solid investment. The reader is encouraged to research various sector ETFs or those with specific holdings.
• 10:30 - 13:00: Summary: Recommendations for ETF Quantities This chapter delves into assessing the aptness and quantity of ETFs in one's investment portfolio. It introduces a free tool for this evaluation. Additionally, there's a brief mention of a coffee cup and a sponsorship by Trade, noted for offering excellent coffee.
• 13:00 - 14:00: Conclusion and Call to Action The conclusion chapter emphasizes the appeal of Trade's coffee subscription service. It is portrayed as a unique and personalized experience for coffee enthusiasts. The chapter highlights Trade's innovative approach in matching customers with premium coffee through a brief online taste test, which successfully aligns with the recipient's flavor preferences based on the author's personal testimony.

Ultimate Investing Portfolio 2025: Best Number of ETFs You Should Hold TOTAL Transcription

• 00:00 - 00:30 you all know that the S&P 500 is one of the best index ever and that it is historically appreciated at an average total rate of return over 10% for the life of the fund What if you want to beat that return though how many ETFs should you have in your investing portfolio there's some ETFs that have appreciated more like 18% on average for a 10-year period How many of those should you own there are ETFs that are built more for safety and so when the rest of the stock market's dropping those ones stay steady or might even go
• 00:30 - 01:00 up So how many of those should you have in your portfolio there's also very specialty sector style ETFs to customize the portfolio with ones for Bitcoin or for AI or for healthcare specifically There are also bond ETFs and international ETFs to diversify the portfolio overall With so many choices and honestly most of them very very solid choices which one should we pick and how many in total should you have in your portfolio my name is Nolan Goa My students call me Professor G and I made
• 01:00 - 01:30 this channel to make investing simplified I think that we can all agree that having a very solid broad US-based ETF that has low fees is definitely one of the smartest things that you could do within your portfolio You can either go with one that tracks the S&P 500 or one that tracks the total US stock market index Both of these have very similar returns over a long period of time and they basically both give you just the market average of what the stock market's doing For the S&P 500 there's
• 01:30 - 02:00 so many options and they're all almost identical For ETFs you can invest in VU SPY IVV or SPLG For the S&P 500 and mutual funds there's FX AIX at Fidelity SWPPX at Schwab or VFAX at Vanguard Again all of these track the S&P 500 which is just America's top 500 companies by market capitalization The only real difference is the fee As you can see here most have a fee under 03%
• 02:00 - 02:30 which is amazing For the total US stock market index you could go with VTI which is the ETF at Vanguard or you could choose a mutual fund like VTSAX at Vanguard FSK AX at Fidelity or SWTSX at Charles Schwab Again all of these do basically the same thing have basically the same return They just have a little bit different of a fee So one of these would be your foundational choice Kind of like the main thing that holds up the rest of the portfolio just like how the
• 02:30 - 03:00 foundation of building a house needs to be very strong Same thing with your portfolio But now if you want to add in some AI because you know that AI is going to take over or you want to add an energy ETF for utilities because you want some safety and stability where should you go first you'd want to find a good one For sector ETFs or specialty ETFs I'd recommend looking here first You can cycle through and find a sector that you believe in most and then check out the stats and companies within the ETF to see if it's something you'd like
• 03:00 - 03:30 to add Like this one here XLE for energy is up 1.45% for the year to date while the rest of the market is down pretty bad We can click into the actual fund and see the stats like its expense ratio how it's doing historically the actual holdings of what companies and how much percent within the fund and the overall performance Historically energy is a solid one to hold as you can see here So once you've looked up a couple of different sector ETFs or different ETFs that hold something specific that you're
• 03:30 - 04:00 looking for now is the most important part of the equation Figuring out if it makes sense within your portfolio and if so how many different ETFs in total should you even have within your investing portfolio so we're going to use a free tool to figure this out And I'm going to show you this right here Real quick though I know that you noticed this cool coffee cup right here And I can't wait to tell you about Trade They sponsored this video And I'm 100% serious when I tell you that they sent me the absolute best coffee I've ever
• 04:00 - 04:30 tasted Trade's a coffee subscription service that delivers freshly roasted coffee straight to my door Trades experts have taste tested thousands of coffees to curate over 450 amazing roasts The cool thing about this company is that they have you take this test online that's super short but it makes you pick out what types of flavors you usually like And then they match you with the perfect bag of coffee And I kind of didn't believe it until I saw it until I tasted it myself And wow did they absolutely hit it right on the head I've never had coffee as good as this On
• 04:30 - 05:00 each bag you get a very solid flavor profile and the actual date the coffee was roasted So you know it's fresh As a business professor and entrepreneur myself my favorite thing about this is that we're supporting local roasters all across the United States which makes me very happy This bag here came from Lake Tahoe This one came from Denver Go Broncos And this one came from Los Angeles Right now Trade's exclusively offering our listeners 40% off your first order at
• 05:00 - 05:30 drinktrade.com/investing That's drinkt r a d.com/investing for 40% off Check the link down in my description All right so back to the video And there's an absolutely free tool that you should definitely be using to help figure this out with your portfolio that you have right now The website's called ETFRC.com ETFresearchcenter.com It has a bunch of awesome features and so much of this can be done on the free part So I love that
• 05:30 - 06:00 But go here specifically to fund overlap We want to check fund overlap because what it's telling you is that if it says something like 90% What that basically means is if you have two different ETFs if they overlap each other by 90% that means you're investing in two separate things but 90% of it is the same thing So you're kind of investing in the exact same thing just in two different areas which means you're splitting your money and your money could be used better on a different style ETF or different type of
• 06:00 - 06:30 asset Let me show you this thing in action and how to use it best Like I was telling you before the S&P 500 and the total US stock market are both great foundational things to be invested in but you're going to want to just pick one Let's plug in VU for the S&P 500 and then VTI for the total US stock market Boom 87% the same thing as far as holding the exact same companies within both And then when we look here it's even crazier 99.6% of VU's holdings are
• 06:30 - 07:00 in VTI So this tells me we don't need to hold both of these You just want to pick one So when we were looking at that ETF earlier XLE for energy Let's check that one out With VU the S&P 500 at first glance 4% seems solid But when we dive a little deeper look at this one 95.7% of XLE is in VU already Now we can see the top five overlapping holdings here And I do like looking at the difference in percentage or weight
• 07:00 - 07:30 within the fund to give you an idea So what we saw was if you're already holding VU and then you're adding XLE into your portfolio along with it This might be somewhat redundant You already invest in 95.7% of XLE by holding VU alone So is it wrong to hold VU and XLE no As long as you understand that you're not investing in anything new really you're kind of just adding to a portion of what you're already invested in So you're
• 07:30 - 08:00 just increasing the waiting of those energy style companies within your portfolio I know a lot of you like technology ones like VGT or FTEC because it has all the fun technology companies and AI stuff in it Or you may come across a newer ETF like SMH and think that semiconductors are all the rage and worth adding to the portfolio Do a quick check of the stuff that you already invest in especially the other types of ETFs versus this new one that you want to bring in just to make sure you understand what you're doing Now fund
• 08:00 - 08:30 overlap is not the enemy Let me say that again for those of you in the back Fund overlap is not the enemy Many people only pick investments for their portfolio if it has absolutely no fund overlap or they're at least trying to have the least fund overlap as possible and that's the only thing they care about This is completely wrong For example the S&P 500 is just US companies So some people think they might want to have something that's just international companies and that's the only two things
• 08:30 - 09:00 that they should invest in because there's no fund overlap So you're diversifying across the whole world like VU for the S&P 500 and then VXUS for all international things Of course when you pick something from outside the United States and you're comparing it to something of companies that are only in the United States there's going to be no fund overlap there but that's not the only thing you should be concerned with The next thing you want to look up for these types of ETFs if you're thinking about adding them in is their performance especially over a long period of time at least 10 years if you
• 09:00 - 09:30 can While there's no fund overlap VXUS has performed pretty poor long term 5% over a 10-year period on average per year is not ideal especially when the whole point of investing in that one is you're taking a little bit of a risk with it being outside of the United States So you're hoping to get much more reward out of that At the very least it should be performing at better than the S&P 500 if you're going to be taking more risk than the S&P 500 has If I'm going to take the risk I would rather it
• 09:30 - 10:00 be with something that has a proven higher reward something high-end technology and AI with the AI boom coming This is why I like QQQM or VUG or SCHG or even VGT for my higher risk higher reward portion of my portfolio QQQM tracks the NASDAQ 100 which has had an average return of almost 18% per year the last 10 years and SCHG has had an average return of almost 16% per year the past 10 years When we look at the
• 10:00 - 10:30 fund overlap tool there's a 46% overlap by weight between VU and QQQM Most people ask me why I hold both QQQM and SCG when those two together have a pretty high fund overlap because they're both the same style like growth ETFs But it's because when I look at how much fund overlap there was between VU and QQQM I wanted something that was lower fund overlap but still had that high potential 84.2% of QQQM is in VU When we
• 10:30 - 11:00 look at SCHG only 58.5% of SCHG is found in VU So now I'm getting the higher average return from both of these and then bringing down the fund overlap some as well If you do want to hold ETFs that are totally outside of the ones that you do hold you're probably just going to have to invest in different asset classes in total So like IBIT for Bitcoin you can see that there's a 0% overlap there Meaning that just because VU goes down in the stock market that
• 11:00 - 11:30 doesn't mean your Bitcoin will be affected Same thing with a bond ETF like BND 0% fund overlap there as well So overall how many ETFs that you hold within your portfolio is ultimately up to you But by far I see way too many portfolios that have something like 20 or 30 ETFs and most of them are very redundant investing in almost the same exact thing So all you're doing is spreading your money more thin You're confusing yourself and you're giving
• 11:30 - 12:00 yourself a bunch of anxiety not really knowing what you're invested at because you're looking at so many different positions at all times You don't really remember which ones are your bread and butter which ones are the ones that you actually should be adding to more than the rest of them For 99% of you I recommend that you're holding between one and five total ETFs in total in your entire portfolio At the very least I'm recommending that you have that one large cap US just total market index
• 12:00 - 12:30 something like VTI or the S&P 500 VO To add to that I would add two more ETFs giving it my three fund portfolio which is one ETF that's a foundational ETF one that's going to be higher risk higher reward like those growth ETFs that I was talking about from before and then one more safe but still has high upside gives you solid cash flow and dividends something like SCHD or VYM even Jeeppy or Jeep Q but you're going to want to have those in a tax advantaged account
• 12:30 - 13:00 and we'll talk about that on a different video Many of you especially the ones close to retirement or within retirement might want to add in a bond ETF maybe even a shortterm Treasury ETF like SGOV just to stabilize your money and keep it safe outside of the stock market Other great options would be ones purely for AI or semiconductors ones for speculative assets like Bitcoin ones for real estate or one for something very defensive or recessionproof like energy
• 13:00 - 13:30 or consumer staples Take a look at your portfolio today and make sure that you can categorize what each one of the ETFs that you have is for Which ones are your higher risk but higher reward ones which ones are your safer ones look at the actual holdings or even use the fund overlap tool to show you what you're invested in that's exact same Maybe you have some redundancies and maybe it's time to take some of that out which will overall simplify your portfolio And I promise you your anxiety level will go down your overall attitude with
• 13:30 - 14:00 investing will just go way up Simplify your portfolio and I promise you're going to be more happy and much less stressed To learn more about that three fund portfolio and why it's truly all that you need check out this video here which actually goes over the percentage of each of the three ETFs that would be great for you based on your age because it does change based on your age Or watch this one to keep you going strong in your investing journey And remember to keep investing simplified