#etfs

#etfs

Undoubtedly, the U.S. equity market, which has gotten heavier in the big tech names, has been seen as a place to do incredibly well, especially when compared to the global markets. And while diversifying outside of the U.S. may still not be key to S&P-beating gains over the long run, I do think that it is worth considering what else is out there if you seek more diversification, lower price-to-earnings (P/E) multiples,

It's been a turbulent past couple of weeks, but the S&P 500 is poised to finish the year with some historically decent gains intact. At the time of this writing, the S&P is up just north of 14%. It's a solid return, but less so when you compare the last two years. When you zoom out to the global picture, the S&P 500's gains have been quite subpar, to say the least.

The Social Security Administration announced a 2.8% cost-of-living adjustment (COLA) for 2026, which will benefit approximately 75 million Americans receiving Social Security and Supplemental Security Income payments. This increase translates to an average monthly boost of about $56 for Social Security retirement beneficiaries starting in January 2026, with SSI recipients seeing their increased payments begin on December 31, 2025. The 2026 COLA of 2.8% represents a slight increase from the 2.5% adjustment in 2025, though it remains below the 3.1% average COLA over the past decade.

The end of a calendar year is a good time to assess your investment strategy and make sure it's working for you. And if you're in the process of building wealth for retirement, there are two things you could probably use to supercharge your portfolio - growth and regular income. Investing in ETFs, or exchange-traded funds, is a great way to build out a diversified portfolio while limiting the amount of work you have to do.

"December could bring seasonal tailwinds back to the stock market and return it to all-time highs. Historically, since 1950, it's the third-best month of the year for the Dow and S&P 500; it's also the third-best month for the Nasdaq, since 1971, according to the Stock Trader's Almanac," as noted by CNBC.

The Invesco QQQ Trust tracks the performance of the Nasdaq 100 index and gives access to the 100 largest non-financial companies on the index. QQQ gives access to the top 100 tech stocks in a single ETF. The fund is rebalanced quarterly and reconstituted annually. The Invesco QQQ Trust is a weighted capitalization ETF which means that the companies with a larger market cap have a higher weightage in the ETF.

I'm of the view that passive and active investors alike can find value in owning exchange-traded funds (ETFs). Because there are more ETFs on the market today than individual stocks, there's a fund for every kind of investor. These highly diversified investing vehicles allow investors to purchase a stake in a wide range of companies, with portfolios that are automatically rebalanced based on certain criteria.

I've long been a proponent of diversification, and investing for the long-term in a structured and coherent fashion. Up until recently, most investors looking to create diversified portfolios had to do so on their own, or with the help of an advisor. And before zero trading fees became commonplace (largely due to payment for order flow and the rise of high-speed quantitative investing companies, but that's a story for another day), it was a costly endeavor to do so.

Many Boomers in 2025 need dependable passive income, and one outstanding way to achieve this is to invest in exchange-traded funds (ETFs). Unlike open-end mutual funds, ETFs trade on major exchanges like stocks. They own financial assets, including stocks, bonds, currencies, debt, futures contracts, and commodities such as gold bars. Having more passive income can help cover rising costs, such as mortgages, insurance, taxes, and other expenses.

However, retirees and conservative investors seeking income for living expenses or just as an investment hedge may feel left out - the paltry dividends from pure stock index ETFs are negligible, yet their double digit gains are reliable portfolio asset growth factors that are essential for staying ahead of inflation. The popularity of the ultra high dividend YieldMax ETFs flipped the script and made covered call dividends themselves into a wealth building platform through dividend compounding.

CEO Larry Fink said the global market currently holds more than $4.5 trillion in digital wallets, spanning crypto, stablecoins, and tokenized assets. "A lot of that money is outside the United States," Fink said on CNBC earlier today, emphasizing the opportunity for the firm to reach new investors through digital channels. Fink said tokenization could allow investors who are entering markets through crypto to access more traditional long-term products, such as retirement funds.

With an expense ratio of 0.13%, a yield of about 3.7%, and 155 holdings, including a great deal of real estate investment trusts (REITs), the Vanguard Real Estate ETF ( NYSEARCA: VNQ) is a safe, long-term real estate opportunity. In fact, some of the ETF's top holdings include Welltower, Prologis, American Tower Corp., Equinix, Digital Realty Trust, and Simon Property Group. Plus, it just paid a quarterly dividend of just over 86 cents on June 30. Before that, it paid a dividend of just over 93 cents on March 27. Making it even more attractive is the recovery in commercial real estate. According to analysts at Deloitte, the CRE market is showing signs of recovery in 2025, with some predicting a generational opportunity, as noted in Deloitte's 2025 Commercial Real Estate Outlook. Since bottoming out at around $76 in April, the ETF is now up to $92.81. From here, we'd like to see it rally back to $96 a share. While we wait, we can collect its quarterly payouts.

VOO tracks the S&P 500, an index of 500 large-cap U.S. companies across sectors like technology, healthcare, and finance. Giants like Apple ( NASDAQ:AAPL ), Microsoft ( NASDAQ:MSFT ), and Amazon ( NASDAQ:AMZN ) dominate its holdings, reflecting the performance of America's biggest firms. VTI, on the other hand, follows the CRSP US Total Market Index, encompassing over 3,600 stocks, including large-, mid-, small-, and micro-cap companies. This broader scope captures nearly the entire U.S. stock market, offering more diversification.