The stock market is hitting fresh all-time highs in 2024, but for investors who are still on the sidelines, it’s not too late to get in on the action. The S&P 500 has been on a bull run since October 2022, and with the index reaching new record levels, many investors may be wondering if they’ve missed the boat.
However, trying to time the market is a tricky game, and history has shown that time in the market is more important than timing the market. The S&P 500 has delivered an impressive compound annual return of 10.3% since its inception in 1957, turning a $1,000 investment back then into over $761,000 today.
One way for investors to capture these gains in a diversified and secure manner is through exchange-traded funds (ETFs). Vanguard, one of the largest issuers of ETFs in the world, offers several funds that track popular indexes like the S&P 500.
For investors looking to jump into the market, allocating $800 to buy one share of the Vanguard S&P 500 ETF (VOO) and one share of the Vanguard S&P 500 Growth ETF (VOOG) could be a smart move.
The VOO ETF aims to track the performance of the S&P 500 by holding a stake in all 500 companies in the index. It offers investors a diversified portfolio across 11 different sectors, including technology, healthcare, energy, financials, and real estate. The top holdings in the VOO ETF are tech giants like Microsoft, Apple, Nvidia, Amazon, and Alphabet, giving investors exposure to some of the most innovative companies in the market.
With a low expense ratio of just 0.03%, the VOO ETF is a cost-effective way for investors to track the performance of the S&P 500 index.
On the other hand, the VOOG ETF tracks the S&P 500 Growth Index, which holds 228 of the fastest-growing stocks from the S&P 500. This ETF offers investors the opportunity to earn higher returns by taking on a little more risk, with a focus on tech stocks that have shown strong growth potential.
While the VOOG ETF has a slightly higher expense ratio of 0.1%, it has outperformed the VOO ETF over the past year, delivering a gain of 26.6% compared to 22.6%. Over the long term, the VOOG ETF has also outperformed, with a compound annual return of 15.3% since its inception in 2010.
For investors looking to capitalize on the current market momentum, buying into these ETFs could be a strategic move. As the market continues to reach new highs, there’s still plenty of opportunity for investors to benefit from the ongoing bull run.
