A Smarter Alternative to the Vanguard S&P 500 ETF for Risk-Aware Investors
For equity investors looking to mitigate risk, the Vanguard U.S. Minimum Volatility ETF is a hidden gem in the issuer's vaunted stable.
Overview
In the stock market, many things are true, and new investors can and do learn at least two of them. First, stocks offer significant potential for growing wealth. Second, there is no free lunch.
It's often said that equities don't move up in straight lines. In fact, dating back to 1980, the S&P 500 averages an intra-year drawdown of 14%. Look at a 14% pullback this way. If I pay $100 for a stock today and it declines 14%, it's worth $86. Given that recovery math is even more brutal than high school algebra, I need a 16.3% increase just to reach breakeven.
This Vanguard ETF helps investors avoid some of the S&P 500'[s risks. Image source: Getty Images.
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Originally published at www.fool.com.