Morningstar ratings are a popular way to compare mutual funds and ETFs. They are based on a number of factors, including historical performance, risk, and fees. A 5-star rating means that a fund has consistently outperformed its peers over time, while a 3-star rating means that it has underperformed its peers.
However, it's important to remember that past performance is not a guarantee of future results. Just because VOO has a 5-star rating does not mean that it will continue to outperform its peers in the future.
Consider Your Individual Investment Goals and Risk Tolerance
When deciding whether or not to sell your SWTSX and SWISX for VOO, you need to consider your individual investment goals and risk tolerance. If you are looking for a low-cost, broad-based US stock market index fund, then VOO is a good option. However, if you are looking for a fund with a slightly higher risk profile, then SWTSX may be a better fit.
Don't Forget About International Exposure
VOO only tracks the US stock market, so you may want to consider adding an international fund to your portfolio. Some popular Vanguard ETFs for international exposure include:
- VEA: Vanguard Total International Stock Index Fund
- VWO: Vanguard FTSE Emerging Markets ETF
- VXF: Vanguard FTSE Developed Markets ETF
Speak to a Financial Advisor
Ultimately, the best way to decide whether or not to sell your SWTSX and SWISX for VOO is to speak with a financial advisor. They can help you understand your individual needs and goals and make the best decision for your portfolio.
Here are some additional tips for using Morningstar ratings:
Don't rely on Morningstar ratings alone. They are just one factor to consider when making investment decisions. You should also look at other factors, such as your individual investment goals and risk tolerance.
Be aware of the limitations of Morningstar ratings. They are based on historical performance, which is not always a reliable indicator of future results.
Use Morningstar ratings to compare funds within the same category. This will help you identify funds that have outperformed their peers over time.
Tips for Readers
- Consider your investment goals and risk tolerance before making any changes to your portfolio.
- Don't forget about international exposure.
- Speak to a financial advisor to get personalized advice.
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