For long-term investor enthusiasts, three compelling reasons make the Vanguard S&P 500 ETF a must-purchase:
The stock market's crystal ball for 2025 remains blurry, much like predicting the weather in March. Despite the current market's aged bull run, its longevity is legendary, often lasting several years. However, the overall market appears somewhat overvalued, hinting at an imminent correction. Yet, even the venerable Warren Buffett is once again dipping his toes in the stock market waters, post-2024 hiatus.
So, will this bull continue its run, or will it take a breather for a while, or perform a cha-cha with wild swings? The future of the market is as unpredictable as a rollercoaster ride at an amusement park.
However, one truth remains as steady as the Rock of Gibraltar: markets tend to gain value in the long run. While stock picking can be fun, sticking with a diversified index fund is the safer, wiser choice. And here are three compelling reasons why every long-term investor should consider incorporating a broad market tracker into their portfolio.
Reason 1: Predictable Long-term Index Returns
Despite market catastrophes like the dot-com bubble burst and the subprime mortgage meltdown, the market always manages to bounce back. Investing $3,000 in the S&P 500 market index in 1950 would have transformed into a million-dollar fortune, having weathered several recessions in the process.
Reason 2: ETFs Make Investing Simple
Exchange-traded funds (ETFs) weren't invented back in the 1950s, but lucky for us today, they make investing in the S&P 500 more accessible. The Vanguard S&P 500 ETF (VOO) is my personal pick, thanks to its association with the affordable investment culture championed by Vanguard founder John Bogle.
Reason 3: Time is the Ultimate Ally
Even if you invested at the end of 2007 – right before the market meltdown – your $3,000 could still yield $16,870 today, purely through investing in an S&P 500 index fund. And, if you opted to toss your money into a high-yield savings account, you'd only be $3,776 richer.
Regardless of what the market does in 2025, now's the perfect time to start building your portfolio with a few shares of a broad market tracker like the Vanguard index fund. It might just turn out to be the best financial decision of your financial life.
In 2024, legendary investor Warren Buffett resumed his involvement in the stock market after a hiatus. Considering the market's current overvalued state, many investors might be hesitant to invest in Florida due to potential corrections. However, the long-term potential of the market, as seen in the history of the S&P 500, remains promising, with returns like investing $3,000 in 1950 turning into a million-dollar fortune. Even if one invested at the onset of the 2008 market meltdown, they could still see substantial growth by investing in an S&P 500 index fund compared to a high-yield savings account.
