American Resilience: An Easy Way to Invest in Our Nation
Investing in Vanguard Total Stock Market Index ETF
As we begin a new year with constant uncertainties and endless opportunities, it is important to remember that America has always been a country of resilience. No matter what the world throws at us, we always find a way to press on. From civil wars to economic recessions (and depressions, but we don’t want another one of those), America has seen it all. And yet, we continue to persevere. Why? Because we have always known that better days are ahead. That’s the American spirit. Something that I hope is never lost.
A Long History of Resilience
The United States has always been a resilient country, bouncing back from even the most devastating of events. Take, for example, the civil war. Despite losing over 600,000 lives, America was able to rebuild and become an even stronger nation. I am sure the citizens of the country then were sure that America’s best days were behind her. Yet, they pressed on. Or, look at the Great Depression. The Stock Market crash of 1929 led to widespread economic hardship (nearly 25% of the workforce was unemployed), but America slowly pulled itself out of the depression and went on to experience one of the greatest periods of economic expansion in world history. Do you really think the men, women, and children who were standing in bread lines thought that their nation would continue to rise to be the strongest economy the world has ever seen? Probably not. Yet, they pressed on.
More recently, we’ve faced 9/11, the Great Recession, and a host of other challenges. And yet, here we are, still standing strong and pressing on. There’s no doubt that America is a resilient country with a rich history of overcoming adversity. And it’s that same spirit that has made our economy one of the strongest in the world. Despite all of the challenges we face, the United States continues to be a major force in the global economy. In fact, according to the World Bank, America is still the largest economy in the world with a GDP of over $22.8 trillion. That’s nearly $6 trillion larger than China’s GDP, which is the second largest in the world. Don’t forget India, which currently sits at $3.2 trillion GDP, and is expected to reach $10 trillion GDP by 2035. And it’s not just our overall size that matters; it’s also the strength of our businesses. Many of the world’s largest and most successful companies are based in the United States, including Apple, Google, Walmart, and General Motors. Most people only talk about corporations when discussing the strength of America’s businesses, but don’t forget small businesses. Small businesses make up nearly 43% of our nation’s GDP.
If you keep hearing GDP and do not know what it stands for, GDP stands for gross domestic product. It measures the total value of all goods and services produced within a country in a single year. It is an important indicator of how well an economy is doing and can be used to compare economies of different countries around the world, like between the U.S. and China.
Why You Should Care About America’s Resilience
As an investor, you may be wondering why you should care about America’s resilience. After all, there are plenty of other places to put your money besides the United States. And while that may be true, there are several reasons why it pays (literally) to keep your money here in America.
First and foremost, when bad things happen in America, such as natural disasters or terrorist attacks, the rest of the world usually feels it too. That’s because America is such a large part of the global economy. In fact, the United States accounts for nearly 25 percent of the world’s GDP. So when something happens here in America, it can often have ripple effects throughout the world, and that includes your investments. Ever heard of the saying when America sneezes the world catches a cold? It still holds true today.
Although we cannot predict some of the events that have plagued America (Covid, anyone?), history has shown us time and again that America is a resilient nation that always manages to come back stronger than before. Just think about how quickly New York City rebounded after 9/11 or how Houston is already flourishing after hurricane Harvey. Look at how quickly areas in Florida are rebuilding their bridges and infrastructure after hurricane Ian. We think that this is normal and happens all across the world, but our ability to quickly rebuild is something that we should be proud of. Given this track record of resilience, it’s no wonder that investing in America has always been a smart move, regardless of what’s going on in the world around us.
As an investor, you can tap into this resiliency by buying shares of VTI (Vanguard Total Stock Market ETF), an index fund that tracks companies like the ones mentioned above that operate around the globe. By doing so, you’ll be investing in some of the best and most resilient businesses in the world. And isn’t that what investing is all about? For all you DOGE “to the moon” supporters out there (you know who you are), I hope your day of triumph does come, but until then, stay invested in other things like VTI as well.
Why Invest in VTI?
VTI is an index fund that tracks over 3,000 large and mid-cap companies across dozens of different sectors throughout the United States. That means that when you invest in VTI, you’re getting exposure to some of America’s largest and most successful businesses. And because these companies operate all around the globe, you’re also getting diversification outside of just the United States. That’s important because it helps reduce risk and volatility in your portfolio. Because of that diversification, the fund does not experience as many dramatic drops as some other funds do and has an average annual return of 12.83% over the past 10 years.
One of the reason’s VTI is such a great investment is because it’s been so resilient during periods of market turmoil. For example, during the Great Recession from 2007 to 2009, while some sectors like housing and banking were suffering during that time, others like healthcare and technology were still doing well. And because VTI covers so many different sectors, it was able to weather the storm better than most other investments.
There’s no reason to think that VTI won’t continue to be a great investment today and in the future. The global economy continues to grow and there are still plenty of opportunities for these companies to continue expanding their businesses around the world. So if you’re looking for an investment that will give you exposure to some of America’s brightest businesses and help you build wealth over time, then VTI is definitely worth considering. If you wanted a set it and forget it index fund, this should be added to your list. As long as the attitude of resilience is held in the hearts of Americans, then these investments will prove fruitful for decades to come.
This is not financial advice. For educational purposes only.
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