The Smartest S&P 500 ETF to Consider With $2,000 Today
Market conditions are shaky right now. In times like these, diversification becomes more important than ever.
One of the easiest ways to achieve this is by owning an S&P 500 index fund, and few options are as effective and accessible as Vanguard’s S&P 500 ETF (NYSEMKT: VOO). With a minimal expense ratio and the ability to get started with just $1, this ETF is a reliable choice.
Here’s why putting $2,000 into this fund now could be a smart long-term move.
1. A simple way to diversify instantly
Tech stocks have taken a hit lately, and other industries haven’t been spared either.
- Share prices for major tech names have fallen sharply.
- Many sectors are facing uncertainty, and it’s difficult to predict short-term winners.
The beauty of the Vanguard S&P 500 ETF is that it doesn’t require stock picking.
- Your investment is spread across 500 leading U.S. companies, offering broad exposure in one move.
- Whether tech rebounds or healthcare surges, you’re automatically part of the gains.
Although the S&P 500 recently dipped into correction territory, it tends to recover — and when it does, owning VOO means you’re positioned to benefit without needing to guess which stocks will bounce back.
2. Low fees help you grow your money faster
High fees can eat into your returns more than most investors realize.
- Many actively managed funds charge high management costs.
- Over time, these can significantly reduce what you keep.
Vanguard’s reputation is built on cost-effective investing, and VOO follows suit.
- It charges a tiny 0.03% expense ratio — that’s just $3 annually on a $10,000 investment.
- This low overhead allows more of your money to stay invested and compound over time.
In short, keeping fees low is one of the best ways to maximize long-term gains, and VOO excels at it.
3. Start investing with just $1
Buying into 500 top companies might sound expensive, but ETFs make it accessible.
- VOO lets investors buy fractional shares, starting with as little as $1.
- This makes it ideal for both beginners and those with limited capital.
You also gain the advantage of high liquidity.
- Buying and selling shares is fast and simple, making your investment easily accessible.
- It’s flexible enough to fit into any portfolio, large or small.
For investors building up positions gradually, or managing funds across different assets, that flexibility is a huge benefit.
What investors should remember
Market dips are normal, and investing through volatility is part of the game.
- According to a 2022 study by Charles Schwab, 10%+ market declines happened in 10 of the past 20 years.
- Reacting emotionally to these dips often leads to missed opportunities.
VOO won’t shield you from downturns, but its diversification makes the ride smoother.
- More importantly, history shows the S&P 500 rebounds strongly after corrections.
- Since 1974, it has gained 8% on average in the month following a correction bottom, and over 24% in the year that follows.
That’s a compelling reason to stay invested — and why now might be the right time to make your move.