"The Vanguard S&P 500 ETF is often considered an appropriate investment for savers who want instant diversification in their portfolios. VOO aims to match the performance of the S&P 500 index itself, which consists of the 500 largest publicly traded companies by market capitalization. To put it another way, the companies VOO invests in are large, established businesses. And because there are so many of them, VOO can be a good investment for people who are skittish about researching stocks individually."
"What's in store for VOO? It's impossible to know what the coming years have in store for VOO or the S&P 500 itself. The S&P 500's average yearly return is roughly 10%. This doesn't mean that the index will generate that return every year, though. It's common for stock values to fluctuate based on a host of factors. It's also more than possible for the broad market to experience a downturn."
"Meanwhile, there are some financial experts who think that many of the stocks in the S&P 500 are overvalued right now. If so, it may be that the index is due for a correction. Since it's not possible to predict where the S&P 500 will go over the next five years, if you're going to invest in VOO, it's a good idea to have a long-minded approach."
VOO rose over 110% in the past five years and about 18% in the past year. VOO tracks the S&P 500, providing diversified exposure to the 500 largest publicly traded U.S. companies. The fund suits investors seeking simplicity and diversification instead of researching individual stocks. The S&P 500's long-term average annual return is roughly 10%, but returns vary year to year and are not guaranteed. Market fluctuations, potential downturns, and concerns that some S&P 500 stocks are overvalued increase the risk of a correction. A long-term investment horizon and realistic expectations are advisable for VOO investors.
Read at 24/7 Wall St.
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