The historical performance of this S&P 500 ETF suggests it could potentially transform a monthly income of $500 into a million dollars.
The Vanguard S&P 500 ETF (VOO), which tracks the S&P 500 index, has been a reliable choice for investors seeking growth over the long term. With an extremely low expense ratio of 0.03%, this ETF has historically delivered strong long-term returns, averaging about 10% annualized returns since the 1950s.
For those looking to build a habit of constant investing without the need to time the market, dollar-cost averaging (DCA) could be an attractive strategy. By investing $500 per month, a strategy known as DCA, one could potentially turn their investment into just over $1 million in 2055.
However, it's important to consider the current market context. The S&P 500 recently hit new all-time highs, having rallied over 26% from its low point in April 2025. While this suggests strong market momentum, higher valuations typically imply more moderate future returns, especially over the near to medium term.
According to a forecast from mid-2025, the Vanguard 500 ETF price is expected to rise from around $500 in early 2025 to $600 by the end of 2025 (+20% return), $688 by the end of 2026 (+37%), $810 by mid-2028 (+62%), and continuing to increase beyond $1,300 by 2036, representing a potential cumulative gain of over 160% from 2025 levels.
On the other hand, Vanguard's Capital Markets Model offers a more conservative outlook for U.S. equities overall. Due to elevated current valuations, Vanguard expects lower-than-historical annualized returns over the next 10 years, roughly in the range of 6.3% to 8.3% for value stocks specifically, with broad U.S. equities expected to be even lower.
Investors should balance the ETF's strong historical performance and growth potential with caution about stretched valuations today, understanding that returns could be somewhat muted compared to past decades but still positive over a decade or more.
The S&P 500 index contains 500 large and profitable U.S. companies, providing diversified exposure to all 11 sectors of the economy. Exchange-traded funds (ETFs) like the Vanguard S&P 500 ETF offer a convenient way to gain exposure to different markets, indexes, or trends.
As one of the most reputable companies in the asset management industry, investing in the Vanguard S&P 500 ETF remains a worthwhile investment for those willing to weather short-term volatility to benefit from the market’s historical upward trajectory.
Sources: [1] MarketWatch, Vanguard S&P 500 ETF (VOO) Price Forecast 2025-2036, July 2025 [2] Vanguard, U.S. Equity Outlook 2025-2035, June 2025 [3] Vanguard, U.S. Equity Market Outlook 2025-2035, June 2025 [4] CNBC, S&P 500 Hits New Record High, July 2025
- For those interested in technology-driven investing, the Vanguard S&P 500 ETF, with its diverse exposure to U.S. companies, presents an opportunity to gain access to technology sector growth, as it contains large and profitable companies spanning all 11 sectors of the economy.
- With a constant investment strategy like dollar-cost averaging, one can potentially accumulate significant amount of money over the long term, given the historically strong long-term returns of the Vanguard S&P 500 ETF, averaging about 10% annualized returns since the 1950s.
- Despite the current market context with elevated valuations, finance professionals from Vanguard anticipate positive returns for U.S. equities over a decade or more, though they expect lower-than-historical annualized returns, particularly for value stocks, due to current valuations.
