Where Will the Vanguard S&P 500 ETF (VOO) Be in 2036? History Has Good and Bad News for Investors.

A great way to go about investing is to focus on the long term and invest in companies that seem likely to be much bigger in a decade or more.

Many of us like to keep things simple and invest in one or more low-fee, broad-market index funds, such as the Vanguard S&P 500 ETF (NYSEMKT: VOO). So will that fund do? Well, here's some bad news and some good news.

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First, the bad: No one knows! The stock market is simply dynamic, and occasionally quite volatile. It could drop sharply tomorrow and stay down for years.

Here's the good news: Despite falling every few years, and despite wars, business scandals, financial crises, recessions, and more, the stock market -- including the S&P 500 -- has always eventually recovered, going on to set new high records. Indeed, over many decades, the stock market has averaged annual returns of close to 10%.

A closer look at history can help. Stock researcher Ben Carlson analyzed the rolling average returns for the S&P 500 between 1926 and 2023, saying:

The best 10-year annual return was 21.4% for the period ending toward the tail-end of 1959. That's a total return of roughly 600%. ... The worst 10-year annual return was a loss of almost 5% per year ending in the summer of 1939. That was bad enough for a 10-year total return of -40%. The 1930s were a little rough. The only other time the market experienced negative returns over 10 years was starting with the bursting of the dot-com [bubble] at the start of the 2000s followed by the Great Financial Crisis hitting toward the end of that decade.

Other than these extreme market downturns, every other 10-year period featured an overall gain from the S&P 500.

So take heart. We don't know how the stock market will perform in the short term, but over long periods, it has almost always gone up. Long-term investors will likely do well just investing and hanging on through thick and thin.

Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.