There aren’t many stocks I’d want to hold on to forever, or just buy and forget about. Economic and market conditions can change quickly, and what was once a safe stock may no longer look so solid. When you’re talking about a period of twenty or more than thirty years, it can be virtually impossible to predict what the future will hold for the markets as a whole, let alone for individual stocks.
That’s why an Exchange Trade Fund (ETF) can be an ideal option if you’re investing for the long term. With an ETF, you don’t have to worry about picking stocks or updating your portfolio to reflect the latest trends. Many Vanguard ETFs also charge low fees in exchange for excellent diversification. One ETF that can be a solid investment for buy-and-hold investors is the Vanguard S&P 500 ETF (NYSEMKT: VOO).
Start your morning smarter! Wake up with Breakfast news in your inbox every market day. Register for free »
Billionaire investor Warren Buffett has been advocating for years that investors simply buy the shares S&P500. Because it’s a collection of the world’s best stocks, it’s an easy way for even novice investors to grow their portfolios over the long term. Buffett told CNBC in 2017: “The trick is not to pick the right company. The trick is to essentially buy all the major companies through the S&P 500 and do it consistently and in a very, very cheap way. “
And if you’re looking for low-cost funds, this is where Vanguard can come into play. The Vanguard S&P 500 ETF has a low expense ratio of 0.03%. And for that modest amount you get access to the S&P 500 index. It’s a buy-and-forget investment that can be an excellent way to bet on the economy in the long run. And over the years, it has done a great job of tracking the broad index.
While the S&P 500 can be a great way to invest for the long term, investors should remember that volatility can and will occur; it won’t be a straight line in value. As a reminder, you only need to look back to 2022, when the index lost almost 20% of its value. And depending on which analyst you ask today, some are predicting even bigger losses next year given the high valuation of the markets.
But if you’re investing for not just years but decades and possibly the rest of your life, then the good news is that you don’t have to worry about a bad year, because in the long run the S&P 500 will likely recover. as it has always been. The overwhelming long-term trend is that the index will increase in value, and the only question is what returns the index will ultimately average. Historically, the annual return has been around 10% per year, but that could be lower in the coming years as it reaches new highs in 2024.
But regardless of what the annual price will be over the next twenty or thirty years, chances are you’ll still be better off following the S&P 500 and getting exposure to it today rather than waiting and trying to time the price. market. Holding the Vanguard S&P 500 ETF in your portfolio is one of the safest ways you can invest in the stock market over the long term and can help you mirror the index’s returns without paying high fees.
Have you ever felt like you missed the boat on buying the most successful stocks? Then you would like to hear this.
On rare occasions, our expert team of analysts provides a “Double Down” Stocks recommendation for companies they think are about to pop. If you’re worried that you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
-
Amazon: If you had invested $1,000 when we doubled in 2010, you would have $24,113!*
-
Apple: If you had invested $1,000 when we doubled in 2008, you would have $42,634!*
-
Netflix: If you had invested $1,000 when we doubled in 2004, you would have $447,865!*
We’re currently issuing ‘Double Down’ warnings for three incredible companies, and another opportunity like this may not happen anytime soon.
See 3 “Double Down” Stocks »
*Stock Advisor returns November 11, 2024
David Jagielski has no position in the stocks mentioned. The Motley Fool has positions in and recommends Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.
1 Top Vanguard ETF You Can Buy and Hold Forever was originally published by The Motley Fool
