1 ETF and 1 AI Stock I'd Buy If I Were in My 20s

There's a lot of uncertainty in the market right now, as investors try to figure out geopolitical instability, a tough job market, and the threat of rising inflation.

The benefit of being in your 20s is that you have time to let the market rise and fall, without the worry of needing to preserve your returns as you get closer to retirement. But that doesn't mean you shouldn't balance your investments between growth stocks and steadier investments, like an index fund.

If I were 20 years younger and looking for great long-term investments, I'd buy both Nvidia (NASDAQ: NVDA) and the Vanguard S&P 500 ETF (NYSEMKT: VOO). Here's why.

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Tap into a booming AI company with massive profits

If you're in your 20s, you've really only seen huge gains from the stock market. The S&P 500 is up 232% over the past decade, and the recent artificial intelligence (AI) boom has given many tech stocks a huge boost.

The upside is that if you've been in the market for a little while, you've likely made some money. The downside is that you might not be used to picking stocks that can weather difficult times.

But one of the best ways to protect yourself from that is to buy shares of companies with significant market leadership that regularly produce strong earnings. And Nvidia is a great example of this.

The company's AI processors hold about 86% of the data center market -- making it the far-and-away leader. Even with companies like Broadcom and AMD expanding their positions (and being good investments in their own right), they don't hold a candle to Nvidia's dominance. And with Nvidia investing billions of dollars in new chip designs, the company will likely hold onto its lead for many more years.

And don't forget Nvidia's profits. The company generated $4.77 in non-GAAP earnings per share in fiscal 2026 -- up an impressive 60% from the previous year. Those earnings give Nvidia far more stability than other AI stocks that might offer higher gains, but don't have the profits to back them up.

Plan for the future with a stable index fund

Picking the right stocks year after year is hard. There are clear trends, like AI, that you can benefit from, but there's also the potential to completely get things wrong, too.

Everyone makes investing mistakes, so you can't entirely avoid that. But you can balance out those mistakes by putting some of your money into the Vanguard S&P 500 ETF, which spreads your money across the 500 companies in the S&P 500.

This might sound like a boring approach, and it might not seem like the best investing strategy when big trends are taking off. But over the long term, it's a very wise strategy.

The S&P 500 has an average annual return of about 10% since 1957, not accounting for inflation. There's no guarantee you'll earn that much, of course, but it's a solid indicator of the fund's potential.

Owning an index fund can help you weather the difficult times -- while keeping your money in the market -- so that when things turn around, you don't miss the gains. Consider that over the past two decades, seven out of the market's 10 best days came within two weeks of the market's 10 worst days, according to J.P. Morgan.

With the Vanguard S&P 500 ETF, you'll be able to stay invested no matter what's happening in the market, and spread your money across every major sector -- ensuring that when the market rebounds, your portfolio will too.

JPMorgan Chase is an advertising partner of Motley Fool Money. Chris Neiger has positions in Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Advanced Micro Devices, Broadcom, JPMorgan Chase, Nvidia, and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.