1 Top Vanguard ETF You Can Buy and Hold Forever

There aren't many stocks I'd feel comfortable holding forever, or simply buying and forgetting. Economic and market conditions can change quickly, and what was once a safe stock may not look as rock-solid anymore. When you're talking about a period of 20- or 30-plus years, it can be next to impossible to project what the future will be for the markets as a whole, let alone for individual stocks.

That's why if you're investing for the long term, an exchange-trade fund (ETF) can be an ideal option. With an ETF, you don't have to worry about picking stocks or updating your portfolio to reflect the latest trends. Many Vanguard ETFs also charge low fees in exchange for some excellent diversification. One ETF that can be a solid investment for buy-and-hold investors is the Vanguard S&P 500 ETF (NYSEMKT: VOO).

Mirroring the S&P 500 can be the safest and simplest strategy

For years, billionaire investor Warren Buffett has advocated for investors to just buy the S&P 500. Since it's a collection of the top stocks in the world, it is an easy way for even novice investors to grow their portfolios in the long run. Buffett told CNBC in 2017: "The trick is not to pick the right company. The trick is to essentially buy all the big companies through the S&P 500 and to do it consistently and to do it in a very, very low-cost way."

And if you're looking for low-cost funds, that's where Vanguard can come into play. The Vanguard S&P 500 ETF has a low expense ratio of 0.03%. And for that modest fee, it gives you access to the S&P 500 index. It's an investment that people can buy and forget about and can be an excellent way to bet on the economy in the long run. And over the years, it's done an excellent job of tracking the broad index.

^SPX data by YCharts

Short-term volatility may be ahead, but in the long run the S&P is a no-brainer

While the S&P 500 can be a great way to invest for the long term, investors should remember that there can and will be volatility; it won't be a straight line up in value. For a reminder, you only need to look back to 2022, when the index lost close to 20% of its value. And depending on which analyst you ask today, some are projecting even larger losses next year, given how highly valued the markets have become.

But if you're investing for not only years but decades and potentially the rest of your life, then the good news is you don't have to worry about a bad year because in the long run, the S&P 500 is likely to recover, as it always has. The overwhelming long-term trend is that the index will rise in value, and it's just a question of what kind of return it will end up averaging. Historically, its annual return has been around 10% per year but that could be lower in the years ahead as it has been hitting new highs in 2024.

However, regardless of what the annual rate will end up being over the next 20- or 30-plus years, odds are you'll still be better off tracking the S&P 500 and having exposure to it today rather than waiting and trying to time the market. Holding the Vanguard S&P 500 ETF in your portfolio is one of the safest ways you can invest in the stock market over the long haul and can help you mirror the index's returns, without incurring high fees.

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

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