Markets on Fire: 5 ETFs to Consider as the Stock Market Hits New Highs

DISCLAIMER: This is not investment advice. The information provided is strictly for educational purposes. Please conduct your own research and consult a qualified professional before making any financial decisions.

If you’ve been watching the stock and crypto markets lately, you’ve probably noticed they’ve been on fire. With strong earnings reports, resilient consumer spending, and an overall positive outlook, the markets are hitting new highs despite the challenges of recent years. For anyone on the sidelines, this surge might feel like the sign to jump in. But with so many options out there, it’s hard to know where to start. Let’s talk ETFs.

Now, if you’re new to investing, here’s a quick breakdown of stocks versus ETFs using a DC nightlife analogy. Owning a stock is like having a small stake in The Park. When it’s packed and thriving, you benefit. But if things slow down, you feel the hit too. An ETF, though, is like having a share in the entire DC nightlife scene—The Park, Rosebar, The Bullpen, 12 Stories, and LaVie. Instead of betting on one spot, you’re investing in the whole scene. So, if one venue has a slow night, you can still gain from the others that are buzzing. ETFs bundle multiple stocks (or assets) into one investment, offering built-in diversification that spreads your risk and maximizes opportunities for returns across an industry or sector.

Exchange-traded funds (ETFs) are accessible, versatile, and can help you build a balanced portfolio. Whether you’re a seasoned investor or just getting your feet wet, here are five ETFs that might be the foundation you need to step confidently into the market.

1. SPDR S&P 500 ETF Trust (SPY)

If you’re looking to track the pulse of the U.S. market, the SPDR S&P 500 ETF is the way to go. Often seen as the gold standard, SPY tracks the S&P 500 Index and gives you exposure to 500 of the biggest companies across all sectors. For many investors, this ETF is the go-to choice for broad-market exposure, making it a solid pick if you believe in the strength of the U.S. economy.

Price on November 11, 2020: $354.15
Price on November 11, 2024: $598.91
Percentage Gain: Approximately 69.1%

With the S&P 500 hitting record highs, SPY remains an attractive choice for those looking to invest in the resilience of the American market.

2. Invesco QQQ Trust (QQQ)

If you’re all about the tech game, the Invesco QQQ Trust might be your best friend. This ETF tracks the Nasdaq-100 Index, which features 100 of the largest non-financial companies listed on the Nasdaq. We’re talking about household names like Apple, Amazon, and Google—the kind of tech giants that have dominated the market and continue to shape the digital age.

Price on November 11, 2020: $290.84
Price on November 11, 2024: $512.91
Percentage Gain: Approximately 76.3%

For anyone who’s feeling bullish on technology and innovation, QQQ offers a straightforward way to invest in the companies driving the future of the sector.

3. Vanguard Total Stock Market ETF (VTI)

Sometimes the best approach is broad—really broad. The Vanguard Total Stock Market ETF (VTI) gives you exposure to the entire U.S. equity market, from small-cap startups to large-cap powerhouses. This kind of diversification allows you to capture the full scope of the U.S. economy, making it a long-term growth vehicle that minimizes risk while maximizing potential.

Price on November 11, 2020: $180.25
Price on November 11, 2024: $297.45
Percentage Gain: Approximately 64.9%

VTI is like your one-stop shop for investing in U.S. equities, offering a comprehensive, diversified investment in the market.

4. Vanguard S&P 500 ETF (VOO)

If you’re looking for S&P 500 exposure but with a bit more of a cost-conscious approach, Vanguard’s VOO is a great choice. Like SPY, it tracks the S&P 500 Index, but it comes with a notably low expense ratio, making it an attractive option for long-term investors who want to keep fees down. Since it tracks the same index, VOO provides the same exposure to U.S. large-cap stocks but at a slightly lower fee.

Price on November 11, 2020: $335.15
Price on November 11, 2024: $550.61
Percentage Gain: Approximately 64.3%

VOO is popular among both individual investors and financial advisors looking for an easy, low-cost way to participate in the growth of the U.S. market.

5. VanEck Semiconductor ETF (SMH)

For those looking to capitalize on the semiconductor boom, the VanEck Semiconductor ETF (SMH) is a compelling option. This ETF provides exposure to the booming semiconductor industry, which has become a key player in everything from consumer electronics to artificial intelligence. As demand for technology grows, companies in this sector are in prime position to continue driving market growth.

Price on November 11, 2020: $183.45
Price on November 11, 2024: $350.12
Percentage Gain: Approximately 90.9%

The semiconductor industry has seen significant growth, and SMH provides a way to invest in this dynamic sector that shows no signs of slowing down.

ETFs offer a flexible and often lower-cost way to gain diversified exposure to various sectors. But before you dive in, make sure you’re clear about your investment goals and risk tolerance. A bit of research (and maybe a chat with a financial advisor) can go a long way in making sure you’re making the right move.

With the market hitting new highs, now could be the perfect time to take action. These ETFs offer a straightforward path to building wealth over the long term, each bringing its own unique strengths, risks, and rewards to the table. Whether you’re just starting out or looking to level up your portfolio, now might be the time to make your move. After all, you’ve got to be in the game to win it.