An annualized total return of 10% seems small, but the gains add up significantly over decades.
Possibly the best feature of going the passive route is that it requires almost no time commitment from investors.
The stock market is one of the best tools people have at their disposal to build long-term wealth. Many investors find it appealing to pick individual stocks. Choosing the right company can lead to huge returns.
However, it's hard to deny the effectiveness of buying a simple Vanguard exchange-traded fund (ETF), like the Vanguard S&P 500 ETF (NYSEMKT: VOO), and holding it for 30 years.
Missed AI’s "Act 1"? Act 2 Could Be 15x Bigger. Most investors think they missed the AI boat because they didn't buy Nvidia in 2005. But according to our analysts, we’re only at the end of "Act 1"—the R&D phase. "Act 2" is the global rollout. Continue »
Image source: Getty Images.
The S&P 500 (SNPINDEX: ^GSPC) comprises approximately 500 large, profitable American businesses. By owning the Vanguard S&P 500 ETF, investors instantly own a significant chunk of the U.S. economy. History says betting on leading domestic companies has been a fruitful endeavor.
Over the past 30 years, the popular benchmark has generated an annualized total return of more than 10.3%. Assuming this performance holds over the next three decades, a $10,000 starting amount would be worth $192,000 in 2056.
Investors can choose to dollar-cost average every month, adding new money regularly. This automated approach builds a valuable habit of consistent investing.
An underappreciated point is that investors don't need special analytical skills. And buying and holding the Vanguard S&P 500 ETF requires no time commitment. It's a hassle-free way to gain exposure to the stock market.
Before you buy stock in Vanguard S&P 500 ETF, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Vanguard S&P 500 ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $379,123!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,396,103!*
Now, it’s worth noting Stock Advisor’s total average return is 933% — a market-crushing outperformance compared to 212% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of October 1, 2026.
Neil Patel has positions in Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.