The S&P 500 has been a bit of a roller coaster for investors in recent weeks. The benchmark has shifted from gains to losses and back multiple times — and often during very short periods. This is amid a variety of concerns, from questions about artificial intelligence (AI) spending levels to worries about economic growth. And the biggest weight of all right now may be the conflict in Iran, which deepened in recent weeks and turned into a war.
So, you may not feel very excited about investing right now. But, during tough times, it’s important to look beyond the present and into the future: Today, stocks and other assets may be suffering, but history has demonstrated that quality players always have recovered.
And that’s why the following S&P 500 Vanguard ETF is a no-brainer buy right now for less than $1,000.
Image source: Getty Images.
A look at history
As mentioned, the S&P 500 has been traversing a rough patch, with the ups and downs leaving it little changed so far this year. But this famous index has been known to recover after every dip, downturn, or even market crash, as we can see in the chart below.
In fact, over time, it’s delivered an average annual return of 10%, making it a solid long-term investment that investors can count on. And that’s exactly why now, in times of uncertainty, it’s a good idea to seek the safety offered by this index. You can do this by investing in the Vanguard S&P 500 ETF (VOO 1.53%).
This fund mimics the composition of the S&P 500 and therefore will deliver the same performance as the benchmark. Buying this exchange-traded fund is a fantastic idea because it offers you exposure to the companies driving the U.S. economy — and this will always be the case as the index rebalances to admit or remove members on a quarterly basis. The Vanguard ETF follows these moves to ensure that it accurately reflects the index.
Today’s Change
(-1.53%) $-9.53
Current Price
$612.50
Key Data Points
Day’s Range
$612.42 – $617.71
52wk Range
$442.80 – $641.81
Volume
51K
The advantage of diversification
The ETF also brings a good deal of diversification to your portfolio as it includes 11 industries, from technology to healthcare and financials. Diversification is positive because it protects you from any sharp movements by one stock or industry: If one industry falls, others may be rising, and that will balance out performance.
The selection of quality companies in the Vanguard S&P 500 ETF — market giants such as Nvidia, Johnson & Johnson, and Costco — should offer you positive returns over time, making it a great investment at any moment, particularly during times of uncertainty. That’s why it’s a no-brainer buy with your $1,000, or even a bit less.
Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale, Nvidia, and Vanguard S&P 500 ETF. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.