We apologize, but this video hasn't loaded.
You can see other videos from our team by tapping here. Try refreshing your browser, or Kevin O'Leary says 'You're actually losing money' in a bank account Despite the Federal Reserve's increasingly hawkish stance, inflation continues to be a problem. In March consumer prices in the US rose 8.5 per cent from a year ago, marking the biggest jump since 1981. That means keeping large amounts of money in a low-interest savings account is a big mistake, according to Shark Tank star and investment mogul Kevin O Leary. In a recent interview with CNBC, he said you are getting very little interest right now in a bank account. Inflation is over six per cent. You're losing money every 12 months. O Leary suggests having three months of salary on hand in case of emergency. After you have built that cushion, O Leary recommends investing in index funds, which are an easy and diversified way to get exposure to the stock market.
Here is a look at three index funds. Each of them focuses on different chunks of the market - own all three and you are well-diversified. The S&P 500 Index is widely considered to be the benchmark for the U.S. stock market. Several funds track the S&P 500 in order to provide investors with convenient exposure to U.S. equity. If a fund wants to use the S&P 500 name, it has to pay a licensing fee that is passed on to investors. The Fidelity ZERO Large Cap Index Fund closely mirrors the performance of the S&P 500. It is not an official S&P 500 copycat, so it doesn't have to pay the licensing fee. FNILX has an expense ratio of zero per cent. Small-cap stocks don't get as much attention as their large-cap counterparts. But investors shouldn't ignore them. The largest companies we see today were once small. There's a lot of room to grow and companies with a lot of room to grow. Investors can check out the Vanguard Small-Cap ETF for a low-cost way to invest in this growth-oriented group. It tracks companies in the bottom two to 15 per cent of the investable universe as a result of the CRSP U.S. Small Cap Index. VB holds around 1,550 stocks, which is diversified. It has a low expense ratio of just 0.05 per cent. A thing to keep in mind is that small-cap stocks tend to be more volatile than more established large-cap names because they are relatively young.
The exposure outside the U.S. is essential to diversify your portfolio in this age of globalization. It is easy to invest overseas these days. Vanguard Total International Stock ETF tries to match the performance of the FTSE Global All Cap Ex-US Index. By owning the index fund, investors get broad exposure across developed, as well as emerging non-U. The top holdings include Samsung Electronics, Nestle, Tencent Holdings and Toyota. It also owns smaller names and holds over 7,800 stocks, with an expense ratio of 0.07 per cent.
With the S&P 500 down since the beginning of the year, it may be a good time to look at investments that don't track the stock market, such as blue-chip art. Fine art has traditionally only been available to wealthy investors with the thousands or millions needed to buy high-end artworks. This article was created by Wise Publishing. Wise is devoted to providing information that helps readers navigate the complex landscape of personal finance. Wise only partners with brands it believes may be helpful to the reader. This article is not intended to be construed as advice. It is provided without any warranty of any kind.