Key Points
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Investing in the Vanguard S&P 500 ETF (VOO) is akin to investing in the growth of the U.S. economy.
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The S&P 500 and the U.S. economy tend to head in the same direction over time.
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Dollar-cost averaging can help you stay consistent and avoid investing a lump sum right before a price drop.
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Investors have no doubt been feeling mixed emotions lately. On one hand, all three major U.S. stock market indexes — the S&P 500 (SNPINDEX: ^GSPC), Nasdaq Composite, and Dow Jones — are all up for the year. On the other hand, many are worried about a potential crash due to AI bubble fears, stretched valuations, and ongoing geopolitical events such as the war in Iran.
It also doesn’t help that on Nov. 5, the S&P 500 had its worst day since April 2025, and the Nasdaq Composite officially went into correction territory, down nearly 11% from its Oct. 6 high as of market close on Nov. 6.
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Unfortunately, we can’t predict stock market crashes. But even if one is on the horizon, the Vanguard S&P 500 ETF (NYSEMKT: VOO) is a reliable ETF I’ll keep loading up on regardless.
No need to overcomplicate it
VOO is one of my go-to investments because I don’t have to overthink it. It checks plenty of boxes at once, removing much of the “guesswork.” It’s diversified, holding companies from all major sectors; it’s cheap, with a 0.03% expense ratio; and it’s been resilient through every market crash it’s experienced.
VOO itself began trading in September 2010, but the S&P 500 — which it mirrors — has experienced 27 bear markets (drops of at least 20% from recent highs), and just this year, it has reached a new all-time high 28 times (as of Nov. 6).
Past results don’t guarantee future performance, but that’s the long-term trend I’d expect from VOO: the occasional, inevitable bear market or crash, followed by a rebound over time. Even after experiencing the COVID-19 crash and the 2022 bear market, VOO is up nearly 570% since it began trading, averaging 12.5% annual total returns.
Banking on the U.S. economy
The S&P 500 is composed of the 500 largest public U.S. companies, so they have a huge influence on the direction of the U.S. economy. That’s why investing in an S&P 500 ETF like VOO is essentially betting on the U.S. economy’s long-term growth. The S&P 500 and the economy don’t always align perfectly, but they consistently head in the same direction over time.
With a single investment, you’ll get instant exposure to some of the world’s most thorough companies. Whether it’s the “Magnificent Seven” tech stocks, healthcare giants Eli Lilly and Johnson & Johnson, financial powerhouses like JPMorgan Chase and Visa, oil titans ExxonMobil and Chevron, or dozens of other industry leaders, investing in VOO means investing in U.S. heavyweights.
The tech sector accounts for 39.7% of the S&P 500, so its performance will determine much of the index’s short-term trajectory. If we see an AI-fueled pullback, that would hurt, but the index’s long-term appeal is still strong, with most of the big tech companies leading the way.
Right now is a good time to dollar-cost average rather than invest larger lump sums. For example, if you have $500 to invest in VOO monthly, try breaking it into $125 weekly investments or a similar schedule. This helps you stay consistent and avoids investing a lump sum right before a market plunge.
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JPMorgan Chase is an advertising partner of Motley Fool Money. Stefon Walters has positions in Vanguard S&P 500 ETF and Visa. The Motley Fool has positions in and recommends Chevron, Eli Lilly, JPMorgan Chase, Vanguard S&P 500 ETF, and Visa. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.
