One of the most effective ways to invest in stocks is through exchange-traded funds (ETFs), which allow you to invest in multiple companies at once. They may not pay attention to individual deposits because they are not as clear, but they are useful in many cases. They often come with less risk, because you’re not relying on a single company’s performance.
Vanguard, in particular, has a slate of ETFs that make for long-term investing. If you’re interested in adding a few to your portfolio, consider the following two. They each have different focuses that complement each other well.
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The US economy has undoubtedly had its rough patches, but growth remains one of the conditions for long-term growth. That’s why I’m a big fan of investments like the S&P 500 ETF Vanguard S&P 500 ETF (NYSEMKT: VOO ). It is not directly related to the US economy, but it tracks the 500 largest US companies in the market, so they move in the same direction over time.
The S&P 500 has technically outperformed over the past few years (tech now makes up nearly a third of the index), but it still has all 11 major sectors represented. Here is how the VOO is divided:
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Information technology: 33.4%
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Mali: 12.9%
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Telecommunication services: 11%
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Consumer discretion: 10.4%
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health care: 9.4%
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industrial: 8.6%
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Consumer staples: 5%
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Energy: 3.2%
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Facilities: 2.2%
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material: 2%
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real estate: 1.9%
More important than just representing the sector are the companies represented in those sectors. Many of these companies are industry leaders and have continued success (which is how they got included in the index to begin with).
It wasn’t the best start to 2026 for VOO (it fell to nearly 1% as of March 11), but that doesn’t take away from its long-term potential. Past performance does not guarantee future performance, but the S&P 500 has historically had annual returns of around 10% over the long term.
It may not be the outsized gains we’ve seen from individual stocks over the years, but ETFs have proven to be a real way to generate wealth over time. And with VOO’s low expense ratio of 0.03%, you can keep more of your profits in your pocket.
While VOO only has US companies, d Vanguard All Global Stock ETF (NASDAQ: VXUS ) Focuses only on international stocks. VXUS has historically underperformed the S&P 500, but it’s a great way to hedge against any tough cycle in the U.S. economy and take advantage of emerging companies overseas.
