Key Points

• Banks provide what amounts to a necessity service in today's connected world.

• The Great Recession proved that some banks are more resilient than others.

• If you are looking to maximize your dividend income, this ultra-high-yield bank should be on your short list.

• 10 stocks we like better than Bank Of Nova Scotia ›

Banks aren't supposed to be exciting. They are supposed to provide basic services that help the world function on the financial front. Boring is good, but it often doesn't lead to a stock that has an ultra-high dividend yield. That said, Bank of Nova Scotia (NYSE: BNS) is boring enough to buy but "exciting" enough to have a lofty dividend yield. Here's why you might want to jump on this ultra-high-yield bank if you have $10,000 to invest right now.

What does Bank of Nova Scotia do?

Bank of Nova Scotia, which generally goes by the nickname Scotiabank, isn't particularly different from most other large banks. It provides customers with the basics, like bank accounts, checking accounts, and mortgages. It deals with business customers, too. But on top of that it also adds things like wealth management and investment banking. In this way it not only competes with local banks, but also with giants like Bank of America or Citigroup.

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Image source: Getty Images.

That said, there's a key difference here that is important to keep in mind. Scotiabank hails from Canada. Canadian banking regulations are very stringent, leading the largest of the country's banks, of which Scotiabank is one, to have entrenched industry positions. The heavy regulation has also resulted in Canadian banks having a conservative ethos that permeates all aspects of their businesses. All in, Scotiabank has a very solid business foundation.

The best display of this comes from Scotiabank's dividend. It has paid a dividend continuously since it started paying a dividend in 1833. That said, the dividend hasn't increased every single year (more on this below), but it also didn't get cut during the 2007 to 2009 financial crises. The Great Recession, as that deep recessionary period is known, led both Citigroup and Bank of America to cut their dividends.

So it stands out on the dividend front for its consistency. But it also stands out because of the huge 5.7% dividend yield. For reference, the S&P 500 index (SNPINDEX: ^GSPC) is yielding just 1.2% and the average bank has a yield of 2.5%.

BNS Dividend Yield data by YCharts

Why such a high yield from Scotiabank?

Scotiabank's yield would suggest that it is a risky bank. And yet its core Canadian operations would suggest the exact opposite. What's going on? As it turns out, like other Canadian banks, Scotiabank has looked to foreign markets for growth. Most of its peers chose to focus on the U.S. market, but Scotiabank sought to differentiate itself by focusing on Central and South America. That didn't work out quite as well as hoped.

It has since shifted gears, getting out of less desirable markets and focusing on becoming a leading Mexico to Canada bank, as it attempts to bulk up its business in the United States. This overhaul resulted in the dividend not being increased in 2024. However, Scotiabank has made quick progress, and it started increasing its dividend again in 2025.

That doesn't mean the transition process is complete, but it does signal that the board and management are confident in the progress the company is making. All in, Scotiabank looks like a fairly low-risk turnaround story that comes with a very attractive dividend yield. While there's more work to be done, you are being paid well to stick around.

A sizable chunk of Scotiabank stock

A $10,000 investment in Scotiabank today will get a dividend investor a bit over 175 shares of the Canadian bank giant. And it will get you access to a well-above-market and well-above-peer dividend yield. But the key is that the yield is supported by a conservatively run bank that is moving its business in a positive direction.

Should you invest $1,000 in Bank Of Nova Scotia right now?

Before you buy stock in Bank Of Nova Scotia, 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 Bank Of Nova Scotia 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 $636,628!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,063,471!*

Now, it’s worth noting Stock Advisor’s total average return is 1,041% — a market-crushing outperformance compared to 183% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 21, 2025

Citigroup is an advertising partner of Motley Fool Money. Bank of America is an advertising partner of Motley Fool Money. Reuben Gregg Brewer has positions in Bank Of Nova Scotia. The Motley Fool has positions in and recommends Vanguard S&P 500 ETF. The Motley Fool recommends Bank Of Nova Scotia. The Motley Fool has a disclosure policy.

Key Points

• This ETF tracks the performance of the S&P 500, which more than tripled investor capital over the last decade.

• Investors who buy this ETF don't need to spend time trying to successfully research and pick stocks.

• Even at record highs, it's a smart idea for investors to consider putting money to work in the stock market.

• 10 stocks we like better than Vanguard S&P 500 ETF ›

All investors want to find winning stocks to put money behind, similarly to the best professionals out there. Who doesn't want to allocate capital like billionaires Warren Buffett or Bill Ackman?

But for the majority of people, taking a more passive approach makes the most sense. This is easier than ever, thanks to the ample number of exchange-traded funds (ETFs). In fact, Vanguard, the massive asset management firm, has what I believe is a no-brainer option.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Here's one ETF to invest $1,000 in this July.

Image source: Getty Images.

Tracking the S&P 500

As the name suggests, the Vanguard S&P 500 ETF (NYSEMKT: VOO) tracks the performance of the S&P 500 (SNPINDEX: ^GSPC). This benchmark, which is the most closely watched barometer of the stock market's performance, contains 500 large and profitable U.S. businesses. It's how many professional money managers assess their own performance over time.

By buying the Vanguard S&P 500 ETF, investors are betting on the continued ingenuity that has characterized the American economy. This has historically been a very lucrative perspective to have.

The Vanguard S&P 500 ETF gives investors immediate diversification, with exposure to all sectors of the economy. But unsurprisingly, there is a high weighting toward the biggest companies in the market. The top five positions in this ETF are Nvidia, Microsoft, Apple, Amazon, and Meta Platforms, which combined take up 27.2% of the asset base.

Impressive performance at a low cost

The Vanguard S&P 500 ETF's performance is hard to overlook. In the past decade, it has produced a total return of 254% (as of July 15). A $1,000 investment would've grown into $3,540 during that time. That's a wonderful result that shows the power of compounding.

These past gains have been propelled by some key factors. Interest rates have generally been low, which spurs economic activity, as well as helps to grow companies' earnings power. Passive investment vehicles continue to attract a lot of capital, bringing more demand into the stock market. And we've witnessed the rise of powerful tech enterprises that are arguably the best businesses the world has ever seen.

Investors also benefit by buying the Vanguard S&P 500 ETF because they don't need to spend time poring over financial statements or listening to earnings calls. It's cheap, with an expense ratio of just 0.03%, and a hassle-free method to start growing your savings.

Time in the market matters

The S&P 500 has had a choppy year. As of July 15, however, the index is trading in record territory. Investors were concerned about a possible recession amid ongoing trade uncertainty, but the market is now looking much more confident.

Many investors are probably wondering why July is a good month to add the Vanguard S&P 500 ETF to their portfolios. After all, wouldn't it be smarter to simply wait for a pullback before putting money to work? Buy low and sell high, as they say.

While timing the market seems like the right move, it's extremely difficult to execute successfully. Investors could cause more harm to their portfolios, trading in and out of positions at the wrong time and missing the market's best days.

The best thing to do is invest early and often. This is especially true for investors who have a time horizon that spans decades. Even buying at all-time highs won't matter that far into the future. Focus on having the discipline to invest $1,000 in the Vanguard S&P 500 ETF in July. And be ready for the volatility along the way, which is normal.

Should you invest $1,000 in Vanguard S&P 500 ETF right now?

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 $652,133!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,056,790!*

Now, it’s worth noting Stock Advisor’s total average return is 1,048% — a market-crushing outperformance compared to 180% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 15, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Neil Patel has positions in Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Vanguard S&P 500 ETF. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Key Points

• The S&P 500 has rebounded to reclaim new highs.

• However, that doesn't mean investors should wait for a pullback.

• Vanguard offers a number of great ETFs for investors to begin investing in right now.

• 10 stocks we like better than Vanguard S&P 500 ETF ›

When the market is on a tear, it's tempting to sit back and wait for a pullback. But smart investors know that the best strategy isn't timing the market -- it's time in the market.

The market hitting new highs actually isn't uncommon. In fact, a J.P. Morgan study found that since 1950, the S&P 500 hit a new high on about 7% of its trading days. Meanwhile, on nearly a third of the days it hit a new high, it never traded below that price again.

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That's why dollar-cost averaging is so important. And one of the best investment vehicles to use this strategy with is exchange-traded funds (ETFs). By consistently investing in high-quality ETFs, regardless of market swings, you give yourself the best shot at building serious long-term wealth.

With some of the lowest expenses in the industry, Vanguard ETFs are a no-brainer place to start. Let's look at three Vanguard ETFs to begin buying into for the long term.

Image source: Getty Images.

1. Vanguard S&P 500 ETF

If you're going to own just one ETF, the Vanguard S&P 500 ETF (NYSEMKT: VOO) is the one. The ETF gives you instant exposure to the 500 largest U.S. companies. That includes the biggest winners of the past decade, including Apple, Microsoft, Nvidia, Alphabet, and Amazon. These five stocks alone make up nearly 25% of the index.

What makes this ETF such a great core holding is how it adapts over time. When winners emerge, they just become a larger part of the index. The index leans into the Darwinian principle of survival of the fittest, letting the strongest stocks lead the way higher while laggards fall by the wayside.

This investment mechanism works and is backed by the Vanguard S&P 500 ETF's strong track record of returns. Over the past 10 years, the ETF has generated an average annual return of 13.6% -- a period that has included both strong bull and bear markets along the way.

As an added bonus, the ETF's expense ratio is just 0.03%. This means most of the index's returns stay in your pocket. If your goal is to build long-term wealth, you won't find a more efficient or reliable option.

2. Vanguard Growth ETF

For investors who want more exposure to the market's top growth stocks, the Vanguard Growth ETF (NYSEMKT: VUG) is a great option. This ETF focuses on large-cap companies with strong earnings and sales growth, and that naturally skews the portfolio toward tech and consumer names. While it officially tracks the CRSP US Large Cap Growth Index, this is essentially the growth side of the S&P 500.

The ETF holds about 165 stocks, so you're still getting diversification, but it's solely focused on large-cap growth stocks. It has many of the same top holdings as the Vanguard S&P 500 ETF, but in a higher concentration. For example, while Nvidia represented a 7.3% position in the Vanguard S&P 500 ETF at the end of June, it was an 11.6% holding in the Vanguard Growth ETF.

With growth outperforming value for a long stretch over the past couple of decades, this ETF has been a strong performer. It has produced an annual average return of 16.2% the past 10 years. That outpaces the broader market and gives you more upside if big tech and other growth leaders keep running. With an expense ratio of 0.04%, it's a cheap way to invest in large-cap growth stocks without having to pick individual names.

If you want to lean into growth, this is a great way to do it.

3. Vanguard Information Technology ETF

If you want to go even deeper into tech, the Vanguard Information Technology ETF (NYSEMKT: VGT) gives you a more concentrated portfolio of the companies helping shape the future. The ETF owns the top players in semiconductors, software, cloud computing, and most importantly, artificial intelligence (AI). With AI changing the world we live in, this is a great way to invest in this trend.

The portfolio is top-heavy, with Apple, Nvidia, and Microsoft making up nearly 45% of its holdings as of the end of June. But the ETF also gives investors exposure to companies like Broadcom, Palantir Technologies, and Advanced Micro Devices in its top-10 holdings, as well. These are some of the top companies that have been leading the charge with AI.

Meanwhile, the ETF's performance has been nothing short of exceptional. Over the past 10 years, it's generated an average return of 21.4% annually. It also has a low expense ratio of just 0.09%. Given its top heaviness and lack of diversification, this would not be the only ETF I'd own, but it's a great way to help potentially juice your returns and beat the market.

Overall, this ETF is for investors who believe the technology tailwinds, especially around AI, aren't slowing down anytime soon.

Should you invest $1,000 in Vanguard S&P 500 ETF right now?

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 $652,133!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,056,790!*

Now, it’s worth noting Stock Advisor’s total average return is 1,048% — a market-crushing outperformance compared to 180% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 15, 2025

JPMorgan Chase is an advertising partner of Motley Fool Money. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Geoffrey Seiler has positions in Alphabet and Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Apple, JPMorgan Chase, Microsoft, Nvidia, Palantir Technologies, Vanguard Index Funds-Vanguard Growth ETF, and Vanguard S&P 500 ETF. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Key Points

• Americans aren't saving enough for retirement.

• Here are three exchange-traded funds to build your nest egg around.

• Complement them with top-notch individual stocks, such as this AI leader, plus a cryptocurrency to protect against inflation.

• 10 stocks we like better than Vanguard S&P 500 ETF ›

Despite the remarkable U.S. economy, Americans are falling dramatically short of their retirement goals. According to research by The Motley Fool, most Americans are saving and investing in a retirement account, but just 34% believe that they're on track to hit their goals.

The study found that the median U.S. household has just $87,000 saved, with the typical household reaching a peak of around $200,000 between the ages of 65 and 74.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

If you're still working, a diversified investment portfolio can help you change your financial trajectory, even if you're starting later than you had hoped to.

Here are five incredible investments to consider for your long-term portfolio that could help move the needle for your retirement over the coming decades. Consider buying and holding them today.

Image source: Getty Images.

1. An ETF you can build your retirement around

For quick and straightforward portfolio diversification, consider exchange-traded funds (ETFs). These are collections of individual stocks that trade under a single ticker symbol. Among them, it's hard to beat the Vanguard S&P 500 ETF (NYSEMKT: VOO). This ETF tracks the S&P 500, an index of 500 prominent U.S. companies.

Investing in this ETF provides exposure to various market sectors and industries. The S&P 500 adheres to strict selection criteria that help maintain its quality. Its system works. The S&P 500 is arguably the most proven wealth-building machine of all time, making it a no-brainer to include in your retirement portfolio.

2. Casting a wider net, this ETF offers instant diversification

Diversifying your portfolio goes beyond the companies and industries you invest in. It also includes geographic markets. Therefore, you should consider an ETF such as the Vanguard Total World Stock ETF (NYSEMKT: VT), a global stock market ETF with over 9,700 individual stocks from almost every industry across various countries.

It represents an investment in the broader global economy, which is crucial because there may be times when the U.S. stock market stumbles or lags behind other countries. This ETF pairs nicely with the Vanguard S&P 500 ETF as a foundation for your nest egg that should last as long as you need it to.

3. This innovation ETF should also help grow your nest egg

Now, it's time to look to growth to help your money compound over the coming decades. Consider the Invesco QQQ Trust (NASDAQ: QQQ) a fantastic starting point.

This ETF tracks the Nasdaq-100, an index with a heavy focus on technology stocks. It provides abundant exposure to the "Magnificent Seven" stocks, which lead the way in artificial intelligence (AI), cloud computing, e-commerce, digital advertising, and other high-growth industries.

This fund can be more volatile, but it has outperformed the S&P 500 over its lifetime. That may not always be the case, but the world is becoming increasingly tech driven, making the Invesco QQQ an excellent way to bet on innovation as a whole.

4. A leading AI stock that could boost your portfolio's results

It's fine to sprinkle in some individual stocks after you have built a foundation for your portfolio. AI could create trillions of dollars in economic value down the road, making it perhaps the most important growth story you can invest in right now.

Nvidia (NASDAQ: NVDA) has already established itself as an AI powerhouse. It's the dominant leader in supplying chips used to train and run AI models in data centers.

Nvidia continues to grow as companies invest billions to build data centers, and experts predict that these expenditures could amount to trillions of dollars over the coming years. Beyond that, Nvidia could also play a part in emerging AI-driven technologies, such as autonomous vehicles and humanoid robotics. Nvidia is a total package that should continue to thrive, considering the AI era is only just beginning.

5. Hedge for inflation with the flagship cryptocurrency

President Donald Trump recently signed his "One Big Beautiful Bill" into law, officially raising America's debt ceiling. It's another sign that the U.S. government figures to continue spending to support its interests, a long-standing pattern that has steadily increased the country's debt. As a result, it may be worthwhile to include some anti-inflationary investments in your portfolio.

Bitcoin (CRYPTO: BTC) is the largest and most prominent cryptocurrency. Its status and capped maximum supply have resulted in staggering price appreciation that has easily outpaced the stock market for years.

Alternatively, if you're skeptical of cryptocurrencies, consider investing in gold, which remains a popular hedge against inflation to this day. Either way, having some anti-inflationary investments is yet another way to cover all your bases and mitigate risk.

Should you invest $1,000 in Vanguard S&P 500 ETF right now?

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 $671,477!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,010,880!*

Now, it’s worth noting Stock Advisor’s total average return is 1,047% — a market-crushing outperformance compared to 180% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 7, 2025

Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin, Nvidia, and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.

Key Points

• ETFs that have tracked the S&P 500 have always been popular.

• However, with the index getting top-heavy, BlackRock introduced two ETFs to help investors remain invested in the S&P 500 with less megacap exposure.

• After a closer look, it may be best to stick to the original.

• These 10 stocks could mint the next wave of millionaires ›

The largest and most popular exchange-traded funds (ETFs) are those that track the performance of the S&P 500. In fact, the three largest ETFs as measured by assets under management are all ones that mimic the performance of this benchmark index. These funds include the Vanguard S&P 500 ETF (NYSEMKT: VOO), the SPDR S&P 500 ETF Trust (NYSEMKT: SPY), and the iShares Core S&P 500 ETF (NYSEMKT: IVV).

However, some investors have raised concerns about the current heavy concentration of megacap stocks that now dominate the S&P 500. As of July 9, the S&P 500's top three holdings of Nvidia, Microsoft, and Apple made up over 20% of its holdings, while its top 10 holdings represented 38% of the index. With megacap stocks dominating the S&P 500, BlackRock (NYSE: BLK) introduced a couple of new ETFs to let investors invest in the index without the megacap exposure.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

In April, the company launched the iShares S&P 500 3% Capped ETF (NYSEMKT: TOPC), while earlier this month it introduced the iShares S&P 500 ex Top 100 ETF (NYSEMKT: XOEF). The former ETF tracks the performance of the S&P 500 index, but caps each holding's weighting at a maximum of 3%. For stocks that have a weighting above 3% in the S&P 500, the excess weight is redistributed to companies that have not yet reached the 3% cap. Currently, only its top five holdings have a weighting of 3% or slightly above.

The iShares S&P 500 ex Top 100 ETF, meanwhile, tracks the S&P 500 performance excluding the 100 largest stocks, better known as the S&P 100. BlackRock promotes using the ETF in conjunction with the iShares S&P 100 ETF (NYSEMKT: OEF), so that investors can balance their megacap exposure as they want.

Image source: Getty Images.

Is it better to stick with an S&P 500 ETF or one of these new BlackRock ETFs?

The recent top heaviness of the S&P 500, especially among megacap technology names, has drawn a lot of attention. As such, it's not surprising that a firm like BlackRock is looking to give investors some alternatives to keep them invested in the index, but with a little less exposure to these megacap tech stocks.

However, these funds don't have much of a track record and come with higher expense ratios. The iShares S&P 500 ex S&P 100 ETF has an expense ratio of 0.2%, while the iShares S&P 500 3% Capped ETF is at 0.15%, although a fee waiver will bring it down to 0.09% until April 3, 2026. That compares to only 0.03% for the Vanguard 500 S&P ETF, which is the most widely held ETF.

The Vanguard 500 S&P ETF, meanwhile, also has a strong, long-term track record. The ETF has generated an average annualized return of 16.6% over the past five years and 13.6% over the past 10 years, as of the end of June.

Arguably, the S&P 500's strong performance over the years stems directly from the index not capping the weighting of its holdings. As a market-cap-weighted index, it lets the best and strongest companies grow to become an ever-increasing percentage of the index. Ultimately, it is these mega-winners that power the market.

A J.P. Morgan study looking at stocks in the Russell 3000, which is comprised of the 3,000 largest U.S. stocks, between 1980 to 2020, found that most stocks underperformed the index, and that it was these mega-winning stocks that were responsible for most of the market's gains. In fact, it found that two-thirds of stocks underperformed the index during this period, while 40% of stocks had negative returns.

As such, while it may sound tempting to reduce megacap exposure, I think the way the S&P has been set up is why it performs so well in the first place. A coach isn't going to want to limit their starters' minutes in an important game or sit them on the bench if they don't have to, and neither should investors look to do this when it comes to investing.

As such, I'd stick to an S&P 500 ETF like the Vanguard 500 S&P ETF, and just use a consistent dollar-cost averaging strategy.

Where to invest $1,000 right now

When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor’s total average return is 1,047%* — a market-crushing outperformance compared to 180% for the S&P 500.

They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor.

See the stocks »

*Stock Advisor returns as of July 7, 2025

JPMorgan Chase is an advertising partner of Motley Fool Money. Geoffrey Seiler has positions in Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Apple, JPMorgan Chase, Microsoft, Nvidia, and Vanguard S&P 500 ETF. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Key Points

• Small-cap stocks have dramatically underperformed large caps recently.

• There could be some excellent tailwinds for small caps in the coming years.

• Whatever happens, a leveraged ETF is usually a losing strategy to bet on a long-term trend.

• 10 stocks we like better than Vanguard Russell 2000 ETF ›

Throughout most of recent history, small-cap stocks have dramatically underperformed their large-cap counterparts. Over the past 10 years, the Vanguard Russell 2000 ETF (NASDAQ: VTWO) that tracks the popular small-cap index has delivered a 106% total return to investors, compared with 257% from the large-cap Vanguard S&P 500 ETF (NYSEMKT: VOO).

Small-cap stocks have also underperformed over the past five years, the past three years, and pretty much any other multiyear time interval over the past decade. And so far in 2025, the S&P 500 has outperformed the Russell 2000 by more than seven percentage points.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

To be sure, there are some good reasons for this. For one thing, we've had two interest rate increase cycles in the past decade, and the benchmark federal funds rate is 400 basis points higher than it was a decade ago. Generally speaking, rising rates can be a drag on all stocks, but disproportionately affect small caps. Plus, the surge in artificial intelligence investment and the strong performance of mega-ap tech stocks has fueled the S&P 500's outperformance for years.

Having said that, there are good reasons to think now could be a great time to add small-cap exposure to your portfolio. First, although the timing is uncertain, most experts agree that the likely direction of interest rates will be downward over the next few years. Second, there's a massive valuation gap between small-cap and large-cap stocks right now, and small caps are looking rather cheap.

Image source: Getty Images.

1 ETF to invest in small caps now

I've been buying shares of several ETFs in 2025, but the one I've been buying most aggressively is the Vanguard Russell 2000 ETF that I mentioned earlier.

If you aren't familiar, the Russell 2000 is the most widely followed small-cap index and invests in 2,000 different companies. It's a weighted index, but no stock makes up more than 1% of the assets, so it's nicely diversified. And like most Vanguard funds, it's a very cost-effective way to invest, with a low 0.07% expense ratio.

In a nutshell, the Vanguard Russell 2000 ETF is a great way to track the performance of U.S. small-cap stocks over time.

1 ETF to be cautious about

If investing in the Russell 2000 is a good idea, investing in an ETF that delivers three times its performance is even better, right? Well, not exactly.

The Direxion Daily Small Cap Bull 3X Shares ETF (NYSEMKT: TNA) aims to deliver three times the daily returns of the Russell 2000. So if the index rises by 1% tomorrow, this ETF should rise by about 3%.

However, it's important to note that the key word is daily. This ETF is not designed to triple the long-term performance of the Russell 2000. And without turning this into a math lesson, the mathematics of daily leveraged returns aren't favorable for long-term investors. As I mentioned earlier, the Vanguard Russell 2000 ETF has delivered a 106% total return over the past decade. During the same period, the Direxion Daily Small Cap Bull 3X Shares ETF produced a negative 15% total return.

Of course, during a short-term bull run, this ETF could be a good performer. In full disclosure, I bought a small position in it after the initial reciprocal tariff announcement sent small-cap stocks plunging in April, but only to hold for a short period. And although I have both of these ETFs in my portfolio, I have roughly 20 times the amount invested in the unlevered Vanguard Russell 2000 ETF.

The bottom line is that leveraged ETFs can be useful to take advantage of short-term mispricings, but are generally not suitable for long-term investments. To be clear, I believe that there's an excellent opportunity in small caps right now, but a simple, low-cost index fund like the Vanguard Russell 2000 ETF is the best way to capitalize on it for the next several years.

Should you invest $1,000 in Vanguard Russell 2000 ETF right now?

Before you buy stock in Vanguard Russell 2000 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 Russell 2000 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 $687,764!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $980,723!*

Now, it’s worth noting Stock Advisor’s total average return is 1,048% — a market-crushing outperformance compared to 179% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 7, 2025

Matt Frankel has positions in Direxion Shares ETF Trust-Direxion Daily Small Cap Bull 3x Shares, Vanguard Russell 2000 ETF, and 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.

Key Points

• The market is reaching new heights, which can make it a fantastic time to invest.

• ETFs are a hands-off investment that can help you build wealth with minimal effort.

• No matter your goals or risk tolerance, there's an ETF for your portfolio.

The S&P 500 (SNPINDEX: ^GSPC) reached a new all-time high in late June, soaring by more than 26% from its low point in April, as of this writing. Many investors are optimistic that the market will continue climbing, making right now a fantastic opportunity to load up on quality stocks.

ETFs are a simple way to build wealth with little effort, but the right investments are key to maximizing your earnings. With the market reaching new heights, these three Vanguard exchange-traded funds (ETFs) could be poised for significant growth.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Image source: Getty Images.

1. Vanguard S&P 500 ETF

A staple in many investors' portfolios, the Vanguard S&P 500 ETF (NYSEMKT: VOO) is a rock-solid option both when the market is thriving and during slumps.

The S&P 500 ETF includes all the stocks listed in the S&P 500 index itself. From tech behemoths like Apple and Nvidia to century-old brands like Coca-Cola and Procter & Gamble, the companies within the S&P 500 are among the largest and strongest in the world -- making them more recession-proof than many smaller stocks.

Investing in an S&P 500 ETF is also an easy way to build a diversified portfolio with next to no effort. Because this fund contains hundreds of stocks across all sectors of the market, you're more protected if one or two stocks (or an entire industry) get hit hard during a downturn.

Despite its relative safety, though, this ETF can still generate life-changing wealth. The market itself has historically earned an average rate of return of around 10% per year. At that rate, investing just $200 per month could add up to nearly a quarter of a million dollars after 25 years.

2. Vanguard S&P 500 Growth ETF

If you're looking for the safety of an S&P 500 ETF but with a little more power, the Vanguard S&P 500 Growth ETF (NYSEMKT: VOOG) is a fantastic choice. This fund also tracks the S&P 500, but it only includes the companies with the most potential for growth.

This ETF shares many advantages with the Vanguard S&P 500 ETF, in that all the companies within the fund are among the largest and most powerful in the world -- helping to reduce risk. With 212 stocks across all sectors of the market, it also offers ample diversification.

However, because it focuses more on growth rather than simply following the market, it's also more likely to earn above-average returns. In fact, over the past 10 years, this ETF has earned an average rate of return of nearly 16% per year.

VOO data by YCharts.

At that rate, investing $200 per month for 25 years could add up to around $598,000. Just keep in mind that growth ETFs tend to thrive when the market is surging, but they're often hit harder than S&P 500 ETFs during downturns. The key to success with this type of investment is to hold your investment for several years, at least, to take full advantage of the upswings.

3. Vanguard Information Technology ETF

For those looking to add a powerhouse performer to their portfolio, the Vanguard Information Technology ETF (NYSEMKT: VGT) is a strong investment.

This ETF contains 319 stocks exclusively from the tech sector. Industry-specific ETFs can be a smart way to gain exposure to a particular sector of the market, with less effort than buying individual stocks. Also, when you invest in hundreds of stocks at once, you gain more diversification than you would by investing in just one or two stocks from each industry.

The Vanguard Information Technology ETF has a long history of earning above-average returns. Over the past decade, it's earned an average return of more than 21% per year. If it were to continue earning those types of returns, investing $200 per month would amount to more than $1.3 million after 25 years.

VOO data by YCharts.

Again, though, keep in mind that tech stocks tend to face more severe downturns during periods of volatility. If the market takes a turn for the worse, be prepared to hold your investment until the recovery period. This ETF has a long history of surviving downturns, but maintaining a long-term outlook is key.

Investing in ETFs can help you build life-changing wealth with less effort than buying individual stocks, and right now may be a fantastic time to invest as the market soars. By loading up on quality funds and holding them for the long haul, you could earn more than you might think.

Should you invest $1,000 in Vanguard Information Technology ETF right now?

Before you buy stock in Vanguard Information Technology 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 Information Technology 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 $699,558!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $976,677!*

Now, it’s worth noting Stock Advisor’s total average return is 1,060% — a market-crushing outperformance compared to 180% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 30, 2025

Katie Brockman has positions in Vanguard Admiral Funds-Vanguard S&P 500 Growth ETF, Vanguard Information Technology ETF, and Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Apple, Nvidia, and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.

Key Points

• Motley Fool CEO Tom Gardner recently heralded the benefits of investing in the stock market over keeping your money at the bank.

• While stocks will have their ups and downs, over the long term the market tends to greatly outperform.

• The key is to find good stocks to invest in and keep investing in both good markets and bad.

In a recent interview, Motley Fool CEO Tom Gardner said, "The stock market is a bank that pays a higher interest rate than your bank ever will." However, he prefaced this with the fact that not every investment you make is going to go up, and you're not going to have a positive return each and every year.

In fact, Gardner said that if you buy 25 stocks, you need to be comfortable knowing that five of them are likely to be big disappointments. He added that he understands why some people can get intimidated by the stock market, but if you can get past that fear, then you can build a lot of wealth over time. Two of the keys are finding enough good companies to invest in and keeping at it.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Finding winners

The S&P 500 index generated an average annual return of 10.5% over the past 30 years from 1995 to 2024. With banks notorious for paying very low interest rates and even high-yield savings accounts and money market funds currently paying rates less than 5%, investing in the stock market is highly likely to give you a better return over the long term.

Investing in individual stocks is also not easy, as Gardner points out, and you are inevitably going to have your fair share of losers along the way. In fact, a J.P. Morgan study found that between 1980 and 2020, 40% of the stocks in the Russell 3000 index, which consists of the 3,000 largest companies in the U.S., suffered a "catastrophic stock price loss," which it defined as a 70% drop in price from which a stock never fully recovered. In addition, the study found that two-thirds of stocks underperformed the index and 40% of stocks had negative returns.

That's some pretty scary stuff, but remember the stock market as a whole put up some strong returns during this period. How could that be when most stocks underperformed? The answer is that big winners helped power the market returns. These represent about 10% of the stocks in the Russell 3,000 and accounted for most of the index's gains over this period.

So as Gardner notes, find enough good companies to invest in and you can generate some pretty strong returns over time. There are a lot of well-known names that have been big winners over the years. This includes Amazon, Walmart, Starbucks, Chipotle Mexican Grill, Alphabet (Google), Meta Platforms (Facebook), Netflix, Apple, and Microsoft. These are companies with pretty recognizable businesses that aren't too difficult to understand, so you don't need to be turning over rocks looking for obscure companies no one has ever heard of to find eventual megawinners. They are often right in front of your face.

Image source: Getty Images.

The ETF route

Of course, if investors don't want to invest in individual stocks, investing in an index exchange-traded fund (ETF) is another good option. An ETF like the Vanguard S&P 500 ETF (NYSEMKT: VOO) will give you instant diversity with a portfolio of approximately 500 stocks, and look to replicate the performance of the S&P 500 index, which is widely considered the barometer of the U.S. stock market.

The S&P 500 is a market capitalization weighted index, which means that the bigger a company gets (shares outstanding multiplied by share price), the larger a percentage of the index it becomes. This plays perfectly into benefiting from megawinners, as the index naturally lets these megawinners run and become bigger contributors over time.

The Vanguard S&P 500 ETF has a strong track record and is a low-cost way to mimic the performance of the S&P 500 index, which, as noted, is sure to give you a better return than a bank over time. ETFs are also great investment vehicles to use a dollar-cost averaging strategy with, where you invest money each month at a set amount no matter how the market is performing.

Whether you choose individual stocks or ETFs, you want to continue to invest in both bear and bull markets. Investing in bear markets can get you some great prices, while the stock market often will set new floors in bull markets. A separate J.P. Morgan study actually found that the S&P 500 hit highs on 7% of trading days since 1950 and that almost a third of the time, this marked a new floor for the market.

So while the market will have its ups and downs, over the long term, it is one of the best ways to build long-term wealth, and is a surefire way to get you a better return than you ever will at your local bank.

Should you invest $1,000 in Vanguard S&P 500 ETF right now?

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 $697,627!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $939,655!*

Now, it’s worth noting Stock Advisor’s total average return is 1,045% — a market-crushing outperformance compared to 178% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 30, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. JPMorgan Chase is an advertising partner of Motley Fool Money. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Geoffrey Seiler has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Chipotle Mexican Grill, JPMorgan Chase, Meta Platforms, Microsoft, Netflix, Starbucks, and Walmart. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft, short January 2026 $405 calls on Microsoft, and short June 2025 $55 calls on Chipotle Mexican Grill. The Motley Fool has a disclosure policy.

The secret to retiring a multi-millionaire is quite simple. There is no easier way to accomplish this than by using a consistent dollar-cost averaging strategy. If you start investing early and use this investment strategy, your odds of retiring a multi-millionaire are extremely good.

Dollar-cost averaging is one of the simplest and most effective investing strategies out there. Instead of trying to time the market, you simply invest at regular intervals, regardless of where prices are.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

By investing a fixed amount every month, or every paycheck, you'll buy more shares when prices are low and fewer shares when they're high. Over time, this will smooth out your cost basis and help protect you from big market swings. It's a disciplined approach that will keep you investing through both bull and bear markets.

Some of the best investment vehicles to use this strategy with are exchange-traded funds (ETFs). With ETFs, you can get an instant portfolio of stocks without doing a lot of research. ETFs are also very accessible. You can feel comfortable starting with a small amount -- the key is just investing consistently.

Image source: Getty Images.

With the power of compounding, dollar-cost averaging consistently into an ETF can help you retire a multi-millionaire. You also don't have to start with a large amount. If you are in your mid-twenties and have 40 years until retirement, a simple $500 investment each month can turn into a nearly $5 million nest egg by the time you hit retirement age with just a 12% average annual return.

If you're older, though, don't fret. A $1,000 investment each month at a 12% annual return can give you a $3 million portfolio after 30 years. However, the sooner you start, the better, as $1,000 each month for 40 years turns into nearly $10 million.

Let's look at five ETFs with strong track records that can help you retire a multi-millionaire.

Vanguard S&P 500 ETF

With a 12.8% return over the past decade, the Vanguard S&P 500 ETF (NYSEMKT: VOO) is one of the first choices that investors should consider when looking to implement a dollar-cost-averaging strategy. The ETF replicates the performance of the S&P 500, which is widely considered the benchmark for the U.S. stock market.

The ETF is a nice blend of growth and value large-cap stocks, and with around 500 stocks in the fund, it gives investors instant diversity.

Vanguard Growth ETF

Growth stocks have been leading the way in the market for the better part of two decades. The Vanguard Growth ETF (NYSEMKT: VUG) is a great way to invest in this dynamic. With a 15.3% return over the last 10 years, this ETF is another solid choice for investors looking to use a dollar-cost-averaging strategy.

While the ETF officially tracks the CRSP US Large Cap Growth Index, this is essentially the growth side of the S&P 500. It's not as diversified as the S&P 500, with only around 165 stocks in its portfolio, but you're getting the best of the large-cap growth stocks through the ETF.

Invesco QQQ Trust

The Invesco QQQ Trust (NASDAQ: QQQ) has quite simply been one of the best-performing non-sector-specific or non-leveraged ETFs over the past decade. The ETF tracks the performance of the Nasdaq-100 index, which is made up of the 100 largest non-financial stocks that trade on the Nasdaq Stock Exchange. The Nasdaq has long been known as the exchange for emerging growth and technology companies, so the ETF is heavily weighted toward these types of stocks.

The ETF has generated an average annual return of 17.7% over the past 10 years, easily ahead of the return of the S&P 500 over the same stretch. Even more impressive is that it has consistently beaten the S&P 500 more than 87% of the time on a 12-month rolling basis.

Schwab U.S. Dividend Equity ETF

Investing in growth and technology stocks is not the only investment style, and the Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD) is a nice value investment alternative. The ETF tracks the Dow Jones U.S. Dividend 100 Index, which consists of high-yielding U.S. stocks that have long track records of consistently paying out dividends.

While the ETF has only generated a 10.6% average annual return over the past 10 years, it has produced a 12.2% annual average return since its inception in October 2011. That's a solid long-term track record.

ARK Next Generation Internet ETF

If you're looking to swing for the fences, the ARK Next Generation Internet ETF (NYSEMKT: ARKW) could be right for you. Unlike the other ETFs, it is actively managed and does not follow an index. Instead, it is focused on investing in companies "that benefit from the increased use of shared technology, infrastructure and services, internet-based products and services, new payment methods, big data, the internet of things, and social distribution and media." In addition to investing in stocks, it currently has an investment in an ETF that tracks the price of Bitcoin.

The ETF has been a strong performer, generating an average annual return of 18.2% over the past 10 years. However, you'll need a strong stomach, as the ETF has seen some wild swings over the past few years, as shown in the table below.

Data source: Ark Invest.

As such, this ETF is only for the most aggressive investors.

Should you invest $1,000 in Vanguard S&P 500 ETF right now?

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 $713,547!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $966,931!*

Now, it’s worth noting Stock Advisor’s total average return is 1,062% — a market-crushing outperformance compared to 177% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 23, 2025

Geoffrey Seiler has positions in Invesco QQQ Trust and Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Bitcoin, Vanguard Index Funds-Vanguard Growth ETF, and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.

If you know you should be saving and investing for retirement, but you don't know where to start, perhaps take some advice from one of the world's greatest investors. Warren Buffett has increased the value of his company, Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B), by 5,500,000% (nearly 20% annually) over 60 years. In contrast, the S&P 500 index of 500 of America's biggest companies gained about 39,000% (10.4% annually, on average).

You might want to invest in some shares of Berkshire Hathaway itself, as it has been built to last. But Buffett has recommended a different investment for most people.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Image source: The Motley Fool.

What does Warren Buffett recommend?

In his 2013 letter to shareholders, Buffett explained how he has directed his money to be invested for his wife, after his death. (Buffett turns 95 in August.) He wrote:

One bequest provides that cash will be delivered to a trustee for my wife's benefit. (I have to use cash for individual bequests, because all of my Berkshire shares will be fully distributed to certain philanthropic organizations over the ten years following the closing of my estate.) My advice to the trustee could not be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard's.) I believe the trust's long-term results from this policy will be superior to those attained by most investors -- whether pension funds, institutions or individuals -- who employ high-fee managers.

That's right: Buffett is a big fan of simple, low-fee, broad-market index funds for most investors. He knows, after all, that most of us are not skilled stock analysts with appropriate investing temperaments.

Buffett is such a strong believer in the power of broad index funds that he put his money where his mouth is, entering into a 10-year, million-dollar bet in 2008 favoring index funds over hedge funds. He won the bet, of course.

Why an S&P 500 index fund? And which one?

There are many reasons to favor index funds. For example:

• Low fees: The best index funds sport extremely low expense ratios (annual fees) -- in part because managers don't have to spend time studying the universe of investments and selecting when to buy or sell which ones. Instead, they just buy all or most of the securities in the index they track. An expense ratio of, say, 0.03% means you'll pay $3 per year for every $10,000 you have invested in the fund.
• Diversification: Buy into an S&P 500 index fund and you'll immediately have your money spread across hundreds of America's biggest and best companies.
• Ease: If you buy into an index fund in exchange-traded fund (ETF) form, you'll simply buy shares like shares of stock, typically via your brokerage or retirement account.
• Outperformance: Index funds are no slouches when it comes to performance, either. According to the folks at S&P Dow Jones Indices, over the past 15 years, the S&P 500 index outperformed a whopping 89.5% of managed large-cap mutual funds, and it outperformed 84.3% over the past decade.

The S&P 500 has averaged annual returns close to 10% (ignoring inflation) over long periods, and the past few years have featured higher-than-average returns.) So the table below shows how you might amass a fortune by investing $1,000 per month -- $12,000 per year -- over some long periods. I'm including several possible growth rates, too:

Calculations by author via moneychimp.com.

So which index fund(s) should you invest in? Well, you might just choose Vanguard's S&P 500 fund, as Buffett suggested. But you might, instead of or in addition to that, opt for an even broader index. Here are three funds to consider:

Data source: Morningstar.com, as of June 18, 2025.

Here's how broad these funds are:

• Vanguard S&P 500 ETF: S&P 500 index funds encompass 500 of the biggest companies in America, which together make up around 80% of the entire U.S. market.
• Vanguard Total Stock Market ETF: This ETF includes nearly all of the U.S. stock market, spreading your money across more than 3,500 stocks, not just 500. It includes lots of small companies, too.
• Vanguard Total World Stock ETF: This ETF encompasses roughly all the stocks in the world -- more than 9,700 stocks -- all in one easy, low-fee investment.

However you go about it, be sure you have a solid retirement plan in place and that you're executing it. Know that the average monthly Social Security benefit was just $2,002 as of May, which is about $24,000 for the year. Most of us will need to set up more income than that for our futures.

Should you invest $1,000 in Vanguard S&P 500 ETF right now?

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 $676,023!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $883,692!*

Now, it’s worth noting Stock Advisor’s total average return is 793% — a market-crushing outperformance compared to 173% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 23, 2025

Selena Maranjian has positions in Berkshire Hathaway. The Motley Fool has positions in and recommends Berkshire Hathaway, Vanguard S&P 500 ETF, and Vanguard Total Stock Market ETF. The Motley Fool has a disclosure policy.

The Vanguard S&P 500 ETF (NYSEMKT: VOO), also known by its ticker symbol VOO, is one of the most popular funds in the world. Including Vanguard's mutual fund version of the same index fund, investors have $1.4 trillion in assets invested in it.

As the name suggests, this is an index fund that tracks the benchmark S&P 500 (SNPINDEX: ^GSPC) over time. In other words, if the S&P 500 produces a 20% total return for investors over the next two years, this ETF should do the same, net of fees.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Speaking of fees, as a Vanguard ETF, the investment expenses of this index fund are extremely low. It has an expense ratio of just 0.03%, which means that for every $1,000 in assets, your annual investment cost will be just $0.30, which will be reflected in the fund's performance over time.

Image source: Getty Images.

The Vanguard S&P 500 ETF is generally thought of as an excellent "core" investment for a stock portfolio. And in full disclosure, I own shares of it in my own retirement portfolio. But if I were to put new money to work today, I may choose to go in a slightly different direction and buy shares of a similar ETF that has one big difference.

My biggest problem with the Vanguard S&P 500 ETF

To be clear, the Vanguard S&P 500 ETF is a great index fund. If you're simply looking for a low-cost way to match the stock market's performance over time, it could be an excellent addition to your portfolio.

My biggest issue with investing in the S&P 500 is that it has become rather top-heavy in recent years. With the emergence of trillion-dollar tech companies, the S&P 500 is weighted so that well over one-third of its performance is derived from the 10 largest components.

In a nutshell, an S&P 500 index fund has increasingly become a bet on the largest few dozen U.S. companies, and has become less of a broad, diversified way of getting stock market exposure.

An S&P 500 ETF that does things a little differently

If I were putting new money to work today, I would take a closer look at the Invesco S&P 500 Equal Weight ETF (NYSEMKT: RSP). It invests in the same 500 companies you'll find in the portfolio of the Vanguard S&P 500 ETF, but with one key difference.

Instead of allocating assets based on the size of each component, it invests an equal amount in all 500 companies. Of course, there are day-to-day fluctuations, but there's about 0.2% of the fund's assets invested at any given time. This means that smaller components of the S&P 500 like Dollar General carry the same weight as megacaps like Microsoft.

The equal-weight fund does have a somewhat higher 0.20% expense ratio, but this is still on the lower end for a unique ETF.

As mentioned, there's absolutely nothing wrong with a traditional S&P 500 index fund. But if you're not too much of a fan of having your investment's performance largely dependent on just a few companies, this equal-weight counterpart could be worth a closer look.

Should you invest $1,000 in Invesco S&P 500 Equal Weight ETF right now?

Before you buy stock in Invesco S&P 500 Equal Weight 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 Invesco S&P 500 Equal Weight 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 $659,171!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $891,722!*

Now, it’s worth noting Stock Advisor’s total average return is 995% — a market-crushing outperformance compared to 172% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 9, 2025

Matt Frankel has positions in Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Microsoft and Vanguard S&P 500 ETF. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

So you want to invest in the stock market, but you don't want to hand-pick specific stocks. Simply mirroring the S&P 500 (SNPINDEX: ^GSPC) market index can deliver fantastic results over the years, and you'll never lose a single night of sleep worrying about the rise or fall of any particular stock.

But you're working with a strictly limited budget of $500 this month, and the usual exchange-traded funds (ETFs) are a little bit too pricey. Vanguard S&P 500 ETF (NYSEMKT: VOO) traded at $549 per share on June 18. SPDR S&P 500 ETF (NYSEMKT: SPY) costs $597 per stub, and the iShares Core S&P 500 ETF (NYSEMKT: IVV) goes one tiny step further to $599.

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Sure, you can save up a bit more before buying these high-quality ETFs, or use the fractional share feature of your favorite stock brokerage to pick up 83% of an iShares or SPDR share for less than $500. But you actually have one more option. Meet the SPDR Portfolio S&P 500 ETF (NYSEMKT: SPLG) -- a fourth pure-play S&P 500 index fund that costs just $70 per share today.

How SPLG stacks up against the classics

This fund is exactly the same thing as one of the classic S&P 500 index ETFs. They hold the same 503 stocks, reflecting the components of the S&P 500 index. The weightings are identical. Their management fees are slightly different, with an annual expense ratio of 0.09% for the more famous S&P 500 ETF and 0.02% with the lower-priced Portfolio fund. But both offer the same performance as the underlying S&P 500 index, for all intents and purposes:

^SPX data by YCharts

The subtle differences that matter

The SPDR fund managers at State Street (NYSE: STT) agree that these funds are very similar. They underline the fact that the higher-priced fund happens to be the largest and most heavily traded ETF on the market, making it the obvious choice when you're looking for top-notch liquidity. The bid-ask spreads are also lower for this fund, as a direct effect of the unbeatable liquidity and higher price -- bid-ask gaps a couple of pennies apart make a bigger percentage-based difference to a lower-priced ETF.

With lower annual fees and higher price-spread trading costs, the Portfolio fund is arguably the superior choice for long-term holdings. On the other hand, the classic SPY ticker (or its VOO and IVV cousins) offers ever so slightly lower costs for more frequent trades. In other words, the ETF that's easier to trade with a smaller budget brings higher trading costs over time. It's the Sam Vimes "boots" theory of socio-economic unfairness at work.

But there are a couple of awesome upsides this time. State Street makes up for the less efficient economics by charging lower management fees. And the resulting differences are incredibly small.

Image source: Getty Images.

Small budget, smart move

All things considered, I think the Portfolio fund is a winning concept for people with modest investment budgets. For example, my daughter recently opened her first brokerage account with a SPDR Portfolio S&P 500 position that fit her budget just right. Fractional shares weren't an option, and it's probably better to get started quickly rather than saving up for a more expensive ETF.

That position has already posted a double-digit percentage gain in less than three months, and she's off to a good start with a lifetime of intelligent money management.

The SPDR Portfolio ETF may not be the perfect fund for your portfolio, and many investors clearly prefer the higher-priced version. But you should know about it, just in case this lower-priced option ever meets your specific needs. Today, $500 won't quite buy you a full-priced S&P 500 index fund, but you can get 7 SPDR Portfolio shares with that budget.

Should you invest $1,000 in SPDR Series Trust - SPDR Portfolio S&P 500 ETF right now?

Before you buy stock in SPDR Series Trust - SPDR Portfolio 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 SPDR Series Trust - SPDR Portfolio 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 $659,171!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $891,722!*

Now, it’s worth noting Stock Advisor’s total average return is 995% — a market-crushing outperformance compared to 172% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 9, 2025

Anders Bylund has positions in SPDR Series Trust-SPDR Portfolio S&P 500 ETF and 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.

Warren Buffett's investing techniques have resulted in big gains for Berkshire Hathaway over the long term and a billion-dollar portfolio. So you may be wondering this: Could one very easy Buffett-approved investment turn $300 per month into $1 million? The answer is yes, if you follow certain key steps.

This particular investment is an S&P 500 index fund, such as the Vanguard S&P 500 ETF (NYSEMKT: VOO). When you buy shares of this fund, you're betting on the long-term growth of American companies, something Buffett has done throughout his investing career through individual stocks and exchange-traded funds, including this Vanguard one. This has helped Berkshire Hathaway post a compounded annual gain of nearly 20% over the past 59 years.

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Now it's our turn. Let's find out how you can start with $300 and potentially end up with $1 million.

Image source: The Motley Fool.

Why Buffett recommends this investment

First, let's consider why Buffett recommends such an instrument in the first place. The top investor strongly believes in stock picking, but he also emphasizes that investing in a fund that tracks the S&P 500 is the perfect way for nonprofessional investors to gain exposure to America's best companies. You don't have to worry about picking tomorrow's winning stocks -- and this investment also automatically offers you instant diversification across stocks and industries.

It's important to remember that the S&P 500 includes the companies driving the economy of the times -- and the index rebalances quarterly, meaning when you invest in this benchmark, you'll always be invested in the most compelling stocks of the day. Over time, the S&P 500 has delivered an average annual return of 10%, so it's clearly rewarded long-term investors.

Of course, you won't directly buy shares of the index but instead shares of an ETF that tracks the index's performance. The Vanguard S&P 500 ETF holds the same stocks that are in the benchmark and at the same weight, so it can do this job.

Buffett not only recommends this sort of fund to others, but as mentioned above, he's been an investor in S&P 500 ETFs. To further illustrate his commitment to this strategy, he says he's directed a trustee, upon his death, to put most of his cash into such a fund for the benefit of his wife.

Turning a small investment into $1 million

Now, let's consider how you can turn a regular investment of a few hundred dollars into major wealth. It involves the following steps:

• Commit to an investing time period, ideally a long one such as 35 years.
• Make an initial investment in the Vanguard S&P 500 ETF.
• Decide on an amount to add on a monthly basis to this investment and stick to it over your time horizon.
• Watch your investment grow over the long run, thanks to the magic of compounding.

Let's consider a concrete example, using a time period of 35 years and the idea that the index will continue delivering an average annual return of 10%. If you make an initial investment of $1,000 in the Vanguard ETF and go on to invest $300 monthly, the value of your investment could reach $1 million by the end of that time period. You will have invested $127,000 -- and your returns would top $876,000.

If you don't want to set a such a lengthy time horizon or have a smaller amount to invest per month, don't worry. You can adapt this method to your budget and/or invest over a shorter time period, for example 15 to 20 years, and still see significant gains.

So as Buffett has said, an investment in a good index fund offers you a quick and easy way to gain exposure to quality companies that may win over the long run. And by applying the compounding strategy I mention above, you'll truly optimize your investment and may set yourself off on the road to $1 million.

Should you invest $1,000 in Vanguard S&P 500 ETF right now?

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 $658,297!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $883,386!*

Now, it’s worth noting Stock Advisor’s total average return is 992% — a market-crushing outperformance compared to 172% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 9, 2025

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

Warren Buffett is the CEO of the Berkshire Hathaway holding company, where he oversees a number of wholly owned subsidiaries and a $281 billion portfolio of publicly traded stocks and securities. He plans to step down at the end of 2025, capping off a stellar run of success that dates back to 1965.

Had you invested $1,000 in Berkshire stock when Buffett took the helm 60 years ago, you would have been sitting on a whopping $44.7 million at the end of 2024. But he's a seasoned expert who knows exactly what to look for when he's buying stocks, so the average retail investor might struggle to replicate his returns.

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Therefore, Buffett often recommends buying low-cost exchange-traded funds (ETFs) that track indexes like the S&P 500 (SNPINDEX: ^GSPC). The Vanguard S&P 500 ETF (NYSEMKT: VOO) is one he's suggested by name in the past, and it's one of the most cost-effective options.

The Vanguard S&P 500 ETF tracks the S&P 500 by investing in exactly the same companies, and if history is any guide, it could turn $500 per month into $1 million over the long term. Here's how.

Image source: The Motley Fool.

A great index fund for investors of all experience levels

The S&P 500 is made up of 500 different companies, and they have to meet strict criteria to be included. Each company must have a market capitalization of at least $20.5 billion, and the sum of their earnings (profits) must be positive over the most recent four quarters. But even after ticking every box, a special committee has the final say over which companies make the cut.

The 500 companies in the S&P 500 come from 11 different sectors of the economy. Some sectors have a higher representation than others because the index is weighted by market capitalization, which means the largest companies have a greater influence over its performance than the smallest.

That's why the information technology sector has a massive weighting of 30.4%. It's home to the world's three largest companies -- Microsoft, Nvidia, and Apple, which have a combined market cap of $10 trillion.

The table below breaks down the top five sectors in the Vanguard S&P 500 ETF, their weightings, and some of the popular stocks within them:

Data source: Vanguard. Portfolio weightings are accurate as of April 30 and are subject to change.

Artificial intelligence (AI) is a dominant theme in the stock market right now because it's impacting almost every sector of the S&P, especially information technology, thanks to companies like Nvidia and Microsoft. But Amazon, Tesla, Alphabet, Meta Platforms, and even Netflix are using AI in unique ways to supercharge their various businesses.

But diversification is the main reason the S&P 500 is the most widely followed U.S. stock market index. Per the above table, the financial and healthcare sectors make up a combined 25% of the S&P, and the index also offers investors exposure to the industrial, energy, and even real estate sectors.

As I mentioned earlier, the Vanguard S&P 500 ETF is one of the cheapest ways to invest in the benchmark index. It features an expense ratio of just 0.03%, meaning an investment of $10,000 will incur an annual fee of just $3. Vanguard says the average expense ratio of similar ETFs across the industry is a whopping 25 times higher at 0.75%, which can detract from investors' returns over the long run.

Turning $500 per month into $1 million

The S&P 500 plunged by 19% from its record high earlier this year on the back of simmering global trade tensions that were triggered by President Trump's tariffs. But volatility is a normal part of the investing journey because the index suffers a decline of 10% or more every two and a half years, on average, and investors can expect a bear market decline of 20% every six years or so (according to Capital Group).

But even after accounting for every sell-off, correction, and bear market, the S&P 500 has delivered a compound annual return of 10.3% (including dividends) since it was established in 1957.

Based on that return, investors who deploy $500 per month into the Vanguard S&P 500 ETF could join the millionaires' club within 30 years:

Calculations by author.

Past performance isn't a reliable indicator of future results, so there is no guarantee the S&P will continue to deliver annual returns of 10.3%. But forces like AI could add trillions of dollars in market cap to some of the most influential companies in the index, which would support further gains.

Nvidia CEO Jensen Huang predicts AI data center spending will reach $1 trillion per year by 2028, which is great news for his company and every other semiconductor stock in the S&P. Then there are AI subsegments like autonomous driving and robotics, which could be trillion-dollar opportunities on their own.

But even if it takes a little longer than 30 years to turn $500 per month into $1 million, the S&P 500 is still likely to be significantly higher by then, so investors who start their investing journey today will almost certainly be better off than those who remain on the sidelines.

Should you invest $1,000 in Vanguard S&P 500 ETF right now?

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 $657,871!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $875,479!*

Now, it’s worth noting Stock Advisor’s total average return is 998% — a market-crushing outperformance compared to 174% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 9, 2025

JPMorgan Chase is an advertising partner of Motley Fool Money. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Berkshire Hathaway, JPMorgan Chase, Meta Platforms, Microsoft, Netflix, Nvidia, Pfizer, Tesla, Vanguard S&P 500 ETF, and Visa. The Motley Fool recommends Johnson & Johnson and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Looking for an investment to add to your long-term portfolio? Consider the Vanguard S&P 500 ETF (NYSEMKT: VOO), which tracks the S&P 500. It's a smart buy for most investors at most times. Even Warren Buffett has recommended it, directing that most of the money he leaves his wife be put into an S&P 500 index fund.

Here's a closer look at the fund and what's in it. See what you think and whether it might be a good fit for you.

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Image source: Getty Images.

Meet the S&P 500

Let's start with the S&P 500, which is the index tracked by this index fund. The S&P 500 is a grouping of 500 of the biggest companies in the U.S. Here are its recent top 10 components, by weight, as of early June:

Source: Slickcharts.com. ETF = exchange-traded fund.

Note that if you combine the two Alphabet classes, the total weighting is 3.82%, which would put it in fifth place in the ranking. You might also note that all seven of the "Magnificent Seven" stocks -- Apple, Microsoft, Google parent Alphabet, Amazon, Nvidia, Facebook parent Meta Platforms, and Tesla -- are held in the index in rather great proportion. Indeed, together, the top 10 holdings in the S&P 500 make up about a third of the entire index's value.

The S&P 500, like many stock indexes, is a market-capitalization-weighted index, meaning the biggest companies in it will have the most influence on it. That's evident just from the table above, which shows how much more influence Nvidia has than Tesla, and Tesla is the seventh-most influential component.

Remember, too, that there are 490 other stocks in the index, though most of them have relatively little influence on its movement individually. Other components include Costco Wholesale (recently ranked 18th), Starbucks (103), PayPal Holdings (150), Delta Air Lines (277), Ulta Beauty (357), and MGM Resorts International (485).

All together, these 500 companies comprise about 80% of the total value of the U.S. stock market. That's why the S&P 500 is often used as a proxy for the total U.S. stock market -- although doing so does omit thousands of smaller companies.

Why invest in an S&P 500 index fund?

So, why would you invest in a low-fee S&P 500 index fund, such as the Vanguard S&P 500 ETF? Here are some reasons.

For starters, it's a solid performer. The S&P 500 has averaged annual gains of close to 10% over long periods -- a rather powerful growth rate. Here's how your money might grow at that rate over time and at a slightly more conservative rate (because that 10% is not guaranteed):

Source: Calculations by author.

See? If you're diligent and stick with the program, you might amass a million dollars or more investing with just a simple index fund. On top of that, the S&P 500 index has outperformed a whopping 90% of managed large-cap mutual funds over the past 15 years. It's not easy to outperform an S&P 500 index fund.

One reason the S&P 500 index performs so well is that it's not comprised of the same 500 stocks for years and years. It gets adjusted over time. Now and then, some stocks are ejected from the index, and others are added. The ejected ones have likely been struggling or, at the very least, haven't been growing briskly, while the new components have grown enough to merit consideration for the index.

There are more reasons to love S&P 500 index funds: They give you instant diversification, spreading your dollars across technology companies (specializing in cloud computing, semiconductors, cybersecurity, and more), financial services companies, healthcare companies, consumer products companies, energy companies, retailers, and much more. You'll essentially be invested in the American economy.

Consider the Vanguard S&P 500 ETF

So, consider the Vanguard S&P 500 ETF. It's an exchange-traded fund (ETF) -- which is like a mutual fund but trades like a stock, allowing you to buy one or many shares through your brokerage account. It's a smart buy at just about any time, and many people will be best served by simply adding money to it over many years.

Vanguard is known for charging low fees, and this ETF sports an expense ratio (annual fee) of just 0.03%, meaning you'll be charged $0.30 annually for every $1,000 you have invested in the fund. Here's how the ETF has performed on an annualized basis over some recent periods:

Source: Data from Vanguard.com as of May 31, 2025. ETF = exchange-traded fund.

So, give the Vanguard S&P 500 ETF some serious consideration for a berth in your long-term portfolio. (Remember that short-term money that you may need within five or so years is best kept out of stocks.)

Should you invest $1,000 in Vanguard S&P 500 ETF right now?

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 $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $868,615!*

Now, it’s worth noting Stock Advisor’s total average return is 792% — a market-crushing outperformance compared to 171% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Selena Maranjian has positions in Alphabet, Amazon, Apple, Berkshire Hathaway, Broadcom, Costco Wholesale, Meta Platforms, Microsoft, Nvidia, PayPal, and Starbucks. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Berkshire Hathaway, Costco Wholesale, Meta Platforms, Microsoft, Nvidia, PayPal, Starbucks, Tesla, Ulta Beauty, and Vanguard S&P 500 ETF. The Motley Fool recommends Broadcom and Delta Air Lines and recommends the following options: long January 2026 $395 calls on Microsoft, long January 2027 $42.50 calls on PayPal, short January 2026 $405 calls on Microsoft, and short June 2025 $77.50 calls on PayPal. The Motley Fool has a disclosure policy.

The tech sector has been a market-beating beast in recent years. Tech-heavy exchange-traded funds (ETFs) like the Vanguard Information Technology ETF (NYSEMKT: VGT) and the Invesco QQQ Trust (NASDAQ: QQQ) have delivered annual returns of more than 21% over the last three years. Broad market trackers like the Vanguard S&P 500 ETF (NYSEMKT: VOO) only gained 15.5% per year over the same period. Yes, that's a fantastic return from a historic perspective, but the tech sector offered even stronger gains.

Image source: Getty Images.

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The technology boom has been driven by artificial intelligence (AI) news, starting with the public release of ChatGPT in November 2022. Many leaders in the AI market have soared sky-high, adding fuel to the tech sector's market performance fires, but also making those market darlings a bit expensive.

Fortunately, the market-moving forces left a few top-notch companies behind. I still see several tech stocks with a combination of bright business prospects and modest stock prices. Let's check out a couple of underappreciated bargain-bin tech stocks. This dynamic duo looks ready for a fresh bull run.

1. Criteo

Digital advertising has been a troubled sector since the first signs of an inflation crisis in 2021. Paris-based commerce media specialist Criteo (NASDAQ: CRTO) provides purchase-inspiring ad services to global brands. This focus placed the Parisian company in the epicenter of the inflation-based slowdown -- why invest in lavish marketing campaigns when consumers are pinching pennies and tightening belts?

Criteo's revenues have indeed slumped since then, and so has the stock price. You know what's surging in recent quarters, though? That would be Criteo's free cash flows:

CRTO Free Cash Flow data by YCharts

The cash profits took a temporary dip, but came back stronger, with trailing cash flows reaching an all-time high in May's Q1 2025 report. But Criteo's stock price is down more than 30% in the last quarter, and the shares are trading at the bargain-bin valuation of 11.3 times earnings and 6.6 times free cash flow.

I'm not saying the digital ad market is roaring back to life in the spring of 2025. The political climate may result in another inflation spike, and advertisers are already reducing their ad-spot spending right now. Hence, Criteo's undervalued stock may see more volatility and weakness in the coming months. However, I think the market makers have underestimated Criteo's ability to turn cash profits in a soft market.

The Criteo shares you buy at a discount in this downswing should return to more reasonable valuation ratios someday. At the same time, the company's robust cash generation makes it less vulnerable to short-term financial challenges. You can buy Criteo stock with confidence while it's cheap. This one is poised for great long-term returns, and patience is the greatest Wall Street virtue of them all.

2. Hewlett Packard Enterprise

My next recommendation is more of a household name. Hewlett Packard Enterprise (NYSE: HPE) has been around (in some form) since 1939. As the data center and cloud computing operator of the old HP business, HP Enterprise (aka HPE) plays a serious part in the AI boom.

Indeed, seven out of the 10 most powerful supercomputers today were built by HP Enterprise. Only Chinese rival Lenovo has more systems in the top 500 than HP Enterprise, and nobody can match the total number-crunching performance of this company's ultra-powerful systems. Any company or organization that needs a top-performance system for their AI training and operations is likely to check out HP Enterprise's catalog first.

So I'm talking about an AI powerhouse here. Yet, the stock price has dropped 16% lower year to date while smaller system builders Super Micro Computers (NASDAQ: SMCI) and Dell (NYSE: DELL) are up by 41% and down by just 1%, respectively. Trading at 8.9 times earnings and 14.3 times free cash flow, HP Enterprise looks downright cheap next to these challengers.

HP Enterprise's stock could double or triple in price and still be affordable next to Supermicro or Dell. This could be a great value play on the hardware side of the AI boom.

Should you invest $1,000 in Criteo right now?

Before you buy stock in Criteo, 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 Criteo 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 $653,389!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $830,492!*

Now, it’s worth noting Stock Advisor’s total average return is 982% — a market-crushing outperformance compared to 171% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of May 19, 2025

Anders Bylund has positions in Criteo, Vanguard Information Technology ETF, and Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Vanguard S&P 500 ETF. The Motley Fool recommends Criteo. The Motley Fool has a disclosure policy.

In recent days, investors have breathed a sigh of relief. After weeks of concerns about the impact of President Donald Trump's import tariffs, a reason for optimism emerged. The U.S. and China -- the country subject to the highest tariffs -- reached an initial agreement, and one that was better than expected. As a result, the three major benchmarks climbed, with the S&P 500 (SNPINDEX: ^GSPC) even returning to positive territory for the year.

However, amid this excitement about a better situation ahead, billionaire Jamie Dimon remains somewhat cautious. The chief executive officer of JPMorgan Chase in a Bloomberg interview said despite the tariff deal, a recession isn't "off the table at this point." Though the bank's economists lowered their U.S. recession risk forecast to below 50% from 60%, Dimon said current uncertainties such as large deficits and high interest rates could weigh on the economy -- and that market volatility probably isn't over.

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"I think it's a mistake to think we can go through all the things we're going through, and the volatility itself will come down," Dimon told Bloomberg during the bank's conference in Paris.

As CEO since 2005, Dimon has accompanied JPMorgan as its market value soared more than 400% to $743 billion, and he's often looked to for his comments on the general stock market environment to come.

Moving forward, if Dimon is right, the market still may face some challenges even after this week's landmark agreement between the U.S. and China. And that's why it's important to prepare your portfolio to handle any environment. Here are five ways to do just that.

Image source: Getty Images.

1. Favor diversification

If your portfolio is heavily exposed to just one company or industry -- even if it's a winning one today -- now is a great time to adjust your strategy. We've seen in recent weeks that even the strongest companies -- such as artificial intelligence (AI) chip giant Nvidia -- saw their shares drop amid general tariff and economic concerns. So it's never a good idea to place narrow bets when investing in stocks.

Instead, include at least a few industries and eventually several stocks in your portfolio, so if one faces troubled times, the others may compensate. And if you're not as knowledgeable as you'd like to be about a certain industry that you'd like to invest in, don't worry: There's a simple solution. Try an exchange-traded fund (ETF) revolving around that particular industry. It will offer you immediate diversification and exposure to top companies in the field.

2. Invest in companies that have proven themselves

Well-established companies with a long track record of earnings growth over the years are your best friends during uncertain times. They've proven their ability to handle challenges -- so if their financial situations and strategies haven't significantly changed, there's reason to be confident they can do it again.

An example is Amazon (NASDAQ: AMZN). The e-commerce and cloud computing giant struggled with higher inflation a few years ago and even shifted to an annual loss. But the company didn't sit still, and instead used this as an opportunity to revamp its cost structure -- a move that led it back to profitability a year later and continues to make this market giant more efficient.

So, it's worth looking at how a company has managed past difficulties, and those that have excelled may be great candidates for your buy list.

AMZN Net Income (Annual) data by YCharts

3. Buy dividend stocks

No matter what the market is doing in a given year, your portfolio still could deliver some gains if you invest in dividend stocks. These players offer you passive income just for owning the shares. This is something you'll particularly appreciate when the market is down.

How to choose a top dividend company? Look to the list of Dividend Kings, which includes companies such as Coca-Cola, Johnson & Johnson, and many others across sectors. These companies have boosted their dividend payments for at least the past 50 years, a sign that rewarding shareholders is important to them. So you can buy with confidence that these payments likely will continue well into the future.

4. Commit to an asset that's always won over time

It's impossible to predict the future with 100% accuracy. But one particular asset always has won over time, suggesting it could continue along this path. And this is the stock market as a whole -- from the S&P 500 to the Dow Jones Industrial Average (DJINDICES: ^DJI) and the Nasdaq Composite (NASDAQINDEX: ^IXIC). After each past decline, the indexes have gone on to advance over time.

^SPX data by YCharts

To benefit from this, commit to an asset that tracks one of the three major benchmarks. An example is the Vanguard S&P 500 ETF (NYSEMKT: VOO). The purchase will offer you instant diversification as well as a great chance of scoring a win -- as long as you hold on for the long term.

5. Focus on the long term

It may be very tempting to get in on the trendy stock of the moment and sell it a few weeks later for a profit. But it doesn't always work out that way. In many cases, a few weeks after your purchase, instead of gains, you may see losses -- at least on paper. That's all part of the short-term investing routine, and that puts the pressure on you to "time the market."

But I've got good news for you: You don't have to worry about all of that when you invest for the long term -- and through long-term investing, you may set yourself up for an even bigger win. How to do it? Buy quality stocks with bright future stories when they're trading for reasonable prices -- and hold on for at least five years.

You may experience ups and downs, but you won't have to worry about an economic downturn or recession wiping out your gains. By sticking with solid players throughout business and market cycles, you're likely to position yourself for a win over the long run.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $349,648!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $40,142!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $635,275!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, available when you join Stock Advisor, and there may not be another chance like this anytime soon.

See the 3 stocks »

*Stock Advisor returns as of May 12, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. JPMorgan Chase is an advertising partner of Motley Fool Money. Adria Cimino has positions in Amazon. The Motley Fool has positions in and recommends Amazon, JPMorgan Chase, Nvidia, and Vanguard S&P 500 ETF. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.

There are plenty of good places to invest your money right now, but tariffs and economic uncertainty are making it much harder to feel confident about buying stocks in some sectors.

I tend to be cautious about where I put my money, but one investment that almost always looks like a good place to invest is the Vanguard S&P 500 ETF (NYSEMKT: VOO). Here are five reasons it would be my only choice if I had to pick just one stock -- or in this case, an exchange-traded fund -- for my retirement portfolio.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Image source: Getty Images.

1. Instant diversification

One of the best things about the Vanguard S&P 500 ETF is that the money you invest in it will be spread across 500 of the largest U.S. companies, which make up the S&P 500. Because the exchange-traded fund tracks the S&P 500 index, you won't have to worry about picking stocks across a variety of sectors -- you can enjoy a base level of diversification as soon as you own the fund.

With the Vanguard S&P 500 ETF, there's less of a need to know which sector is booming or which company is inventing the next big thing. This is ultimately a bet on the long-term rise of the broad market.

2. It has a fantastic track record

While the common financial disclaimer, "Past performance is not a guarantee of future results," applies to this fund just like it applies to every other stock you might own, the S&P 500 does boast a long history of gains.

The index has delivered an average annual rate of return of 10.1% (not accounting for inflation) since 1957. This Vanguard ETF won't return that exact amount annually -- there will up years and down years. But given enough time, the S&P 500 has always rebounded from its lows and made significant gains.

3. It's inexpensive to own

All funds charge fees, usually quantified as an expense ratio, and the average fee for index equity ETFs is 0.14%. That's already quite low, but Vanguard's fund is a standout for its ultra-low annual fee of just 0.03%.

That means that for every $10,000 you have in the fund, you'll pay just $3 annually. This is especially important as your portfolio grows over time. With the Vanguard S&P 500 ETF, you'll keep more of the gains you make from the market because of the fund's industry-low expense ratio.

4. It's easy to buy and sell shares

While Vanguard's ETF is a fund that tracks the S&P 500, it's not any more difficult to buy and sell than any other stock. This means that if you need to sell some shares of the fund quickly, exit your position, or buy new shares, you can do it the same way you would with any stock through your preferred brokerage.

And because the fund is one of the most popular options out there -- it's the largest Vanguard ETF -- it's highly liquid for when you're ready to sell.

5. You'll have exposure to some of the best companies in the market

The S&P 500 index is composed of some of the largest, most stable, and profitable companies, which means you'll be invested in quality businesses.

Of course, that doesn't mean the fund is immune to volatility -- it's been on a wild ride over the past few months in response to tariffs -- but it does mean that your money is invested in a fund that tracks the growth of many industry-leading companies.

It's worth mentioning that given the considerable uncertainty in the market and economy right now, even stable, profitable companies can underperform in this environment. That's why it's important for investors to remember that if you buy the Vanguard S&P 500 ETF, you should plan to hold onto it for years, just like any other stock, in order to reap the full rewards.

Should you invest $1,000 in Vanguard S&P 500 ETF right now?

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 $614,911!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $714,958!*

Now, it’s worth noting Stock Advisor’s total average return is 907% — a market-crushing outperformance compared to 163% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of May 5, 2025

Chris Neiger 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.

2025 has been an eventful year on Wall Street. The market has been making wild moves in response to unpredictable events. Many market watchers expect a downturn, a recession, and/or another bear market to emerge any day now. Then again, they've already been looking for these negative outcomes for several months.

There was a sharp drop in early April, but it didn't really stick. Whether you call the current situation a bear market or not, it's certainly a period of huge volatility.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

I understand if you've sworn off investing altogether amid these shifting economic conditions However, I've been putting more spare cash to work than usual in recent months -- and I plan to continue doing so. Let me explain why I'm an unusually active stock investor in this fickle market. By the time I'm done, you just might want to join me.

Timing the market is an impossible game

Nobody knows what the stock market will do tomorrow, or next week, or next year.

There are surprises around every corner. Nobody expected the COVID-19 pandemic. The artificial intelligence (AI) surge was another surprise. The shocking dot-com boom was followed by an equally unexpected crash. I could go on and on.

The point is, real-world events have profound and unpredictable effects on the stock market. Some shocks beget golden eras for specific industries. Others can lay a muffling blanket over the whole economy.

So I don't trust anyone who says they know what the market will do over a specific period. Even master investor Warren Buffett can't forecast Wall Street's next moves.

"Let me be clear on one point: I can't predict the short-term movements of the stock market," Buffett said in a 2008 New York Times article. "I haven't the faintest idea as to whether stocks will be higher or lower a month or a year from now."

If Buffett doesn't know, I don't stand a chance of getting it right. It's not for me to forecast when the next market downturn will start, or how deep it might go. Trying to time my stock purchases for the absolute bottom of a potential trough is a bad idea.

Image source: Getty Images.

Time in the market is a winning strategy

That 2008 Buffett article didn't end on that gloomy note, of course. He went on to describe his contrarian investment style, and his focus on holding great stocks for a long time.

"Be fearful when others are greedy, and be greedy when others are fearful," he wrote. Yeah, you've heard that bit before. "Bad news is an investor's best friend. It lets you buy a slice of America's future at a marked-down price."

In the long run, great companies will make patient shareholders happy. If you're not comfortable with picking the best stocks in a crowded market, a diversified mutual fund or exchange-traded fund (ETF) will do the same job.

For example, the Vanguard S&P 500 ETF (NYSEMKT: VOO) will never beat the market. However, it will help you build up your wealth if you invest in it steadily over many years and decades.

So I won't nail the perfect time to buy -- but at least I'm trying

Math is a wonderful science. I'm particularly thrilled about the power of compound growth.

Earning annual returns of 10% on your investments for a decade won't just double your money, because you're not just experiencing those 10% gains on your portfolio's original value. In the second year, you'll also see a 10% gain on the first year's gains, and so on in every year that follows. The benefits really start to rack up over time. In this basic example, If you started with a $1,000 investment, after 10 years, your investment would be worth $2,594.

Longer investment periods will continue to boost the overall returns. Add another decade to that $1,000 thought experiment with perfect annual returns of 10%, and you'd have $6,727 at the end. Going to 30 years results in a $17,449 result.

In reality, your gains won't be smooth. You'll go through down years like 2022 and fantastic periods like 2024. Adding more cash to your portfolio is a great idea when the market is booming. Yet as Warren Buffett suggests, you can get more value for your investing dollar when stock charts are trending down.

What I'm buying in 2025

That's why I don't mind buying stocks and exchange-traded funds in this nerve-wracking economy. My most recent buys have included the Vanguard S&P 500 ETF and the more aggressive Vanguard Russell 1000 Growth (NASDAQ: VONG) ETF. Among my hand-picked stock buys in recent weeks, you'll find a few shares of retail giant Walmart (NYSE: WMT) and media-streaming pioneer Roku (NASDAQ: ROKU). These are some of my best investment ideas right now.

It feels easy to find undervalued stocks right now. I've only shared a few of my 2025 purchases here. Most of them have posted negative returns in the early going, and that's fine. I might just keep buying them at better and better starting prices.

Should you invest $1,000 in Vanguard S&P 500 ETF right now?

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 $617,181!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $719,371!*

Now, it’s worth noting Stock Advisor’s total average return is 909% — a market-crushing outperformance compared to 163% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of May 5, 2025

Anders Bylund has positions in Roku, Vanguard S&P 500 ETF, Vanguard Scottsdale Funds-Vanguard Russell 1000 Growth ETF, and Walmart. The Motley Fool has positions in and recommends Roku, Vanguard S&P 500 ETF, and Walmart. The Motley Fool has a disclosure policy.

The stock market remains volatile but not quite as frantic as earlier this year. Meanwhile, the major market indexes remain well below their recent highs.

Against this backdrop, now is a great time to invest in high-quality exchange-traded funds (ETFs) that track indexes. ETFs are a collection of assets that trade as a single unit and are a great place for new and experienced investors alike because they bring instant diversification with the flexibility to be traded like a single stock.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

And $500 is a great starting point -- but just that. The key to investing, particularly with ETFs, is to contribute consistently over time. It's a strategy known as dollar-cost averaging, where you regularly invest a set amount at a specific time. This could be with each paycheck or on a particular day of the month.

It is important to stick with this strategy, whether the market is up or down. Down markets are a great time to pick up stocks on the cheap and get a better cost basis.

And you should continue to do so even in bull markets, which tend to last a long time. In fact, according to a JPMorgan Chase study, since 1950, the S&P 500 hit a new all-time high on 7% of its trading days, and on a third of those days, the index never dropped lower.

Let's look at three great index ETFs you can begin to invest in right now.

The Vanguard S&P 500 ETF

One of the most popular ETFs in the world is the Vanguard S&P 500 ETF (NYSEMKT: VOO), and for good reason. As the name says, it tracks the roughly 500 largest companies that trade on a U.S. stock exchange. The index is market-cap weighted, which means that the larger a company's value, the bigger part of the portfolio it occupies.

And as with most Vanguard ETFs, it comes with a minuscule expense ratio. Even seemingly low expense ratios, such as 1%, eat into returns over time, especially as your investments grow in size. The Vanguard ETF's expense ratio is only a scant 0.03%.

With this Vanguard ETF, investors get an instant portfolio of the companies that have grown to become some of the world's largest. The index is also generally considered the benchmark for the U.S. stock market as a whole.

The ETF has a long history of solid returns. Over the past decade, it has generated an average annual return of 12.3%, as of the end of April.

The Vanguard Growth ETF

Sticking with Vanguard and its low costs, the Vanguard Growth ETF (NYSEMKT: VUG) is another great option. It mimics the CRSP US Large Cap Growth Index, which is essentially the growth side of the S&P 500. It has a similarly low expense ratio of 0.04%.

The Vanguard Growth ETF gives you an instant portfolio of many of the large-cap growth stocks that have been helping drive the market over the past several years. It is heavily weighted toward the tech sector, which makes up about 57% of its holdings. And some very tech-heavy companies, such as Amazon and Tesla, are categorized into other sectors.

If you're looking for exposure to the so-called "Magnificent Seven" stocks (Apple, Alphabet, Amazon, Meta Platforms, Microsoft, Nvidia, and Tesla), this ETF is a good option. At the end of last quarter, these seven stocks accounted for over 50% of its holdings.

This fund has been a strong long-term performer, generating a 14.5% return over the past 10 years, as of the end of April.

Image source: Getty Images

The Invesco QQQ ETF

Beating the returns of the S&P 500 is not an easy task, but one ETF that has been able to consistently outperform it is the Invesco QQQ ETF (NASDAQ: QQQ), which tracks the performance of the Nasdaq 100. Like the other indexes mentioned above, the Nasdaq 100 is also market-cap weighted. It contains the 100 largest nonfinancial stocks on the exchange.

That index has historically attracted fast-growing companies, particularly in the technology sector. As such, it is also very heavily weighted toward tech, checking in at a similar 57% to the Vanguard Growth fund.

The Invesco ETF has been the best performer of these three over the past decade, with an average annual return of nearly 17% over the past 10 years, as of the end of April. And this has not been just from a couple of big years of outperformance. On a rolling 12-month basis, it has outperformed the S&P 500 more than 87% of the time over the past decade (for the period ended March).

It carries a 0.2% expense ratio, but its consistent outperformance over the years more than justifies its higher cost.

Should you invest $1,000 in Vanguard S&P 500 ETF right now?

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 $617,181!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $719,371!*

Now, it’s worth noting Stock Advisor’s total average return is 909% — a market-crushing outperformance compared to 163% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of May 5, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. JPMorgan Chase is an advertising partner of Motley Fool Money. Geoffrey Seiler has positions in Alphabet, Invesco QQQ Trust, and Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, JPMorgan Chase, Meta Platforms, Microsoft, Nvidia, Tesla, Vanguard Index Funds - Vanguard Growth ETF, and Vanguard S&P 500 ETF. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.