• The S&P 500 index has historically provided solid returns, even when purchased at short-term peaks.

• If you’re looking to invest some capital, the Vanguard S&P 500 Index ETF could be a solid option.

• Still, if you dig a bit deeper into investment strategies, there might be another Vanguard ETF that suits your needs better.

The S&P 500 index is currently approaching record highs. Investing through the Vanguard S&P 500 Index ETF is still seen as a prudent choice, despite the high trading levels. Yet, if you think about valuation, there could be a more advantageous option available. Here’s what to consider:

Starting to invest is important. If you have $1,000 and you’re a novice investor, opting for the market might be the way to go. For most, the S&P 500 index usually serves as a benchmark. Regular monthly investments can also help yield profits in the long run, employing the dollar-cost averaging method.

With the Vanguard S&P 500 ETF, you’d typically choose it first as it closely tracks the same index. With an expense ratio of just 0.03%, it stands as one of the most cost-effective pathways to gain exposure. It’s reasonable to question why you’d pay more for an equivalent service. The market tends to recover even from severe downturns, and it often surpasses previous highs.

If you have $1,000, $10,000, or more to invest, the best move is to act quickly and persist. Yes, you might face temporary losses, but historical trends indicate you’ll likely come out ahead in the long run. Investing in the Vanguard Value ETF might be a prudent consideration, especially when the S&P 500 is near its peak.

With $1,000 towards the Vanguard Value ETF, you could acquire around five shares, owning a collection of large U.S. companies that are undervalued compared to the market. Even now, with the S&P 500 at record levels, this remains relevant.

To illustrate, value-focused ETFs tend to carry an average price-to-earnings (P/E) ratio of about 40, which is on the high side, but not surprising given their growth orientation. In contrast, the Vanguard S&P 500 ETF has a P/E ratio around 29, influenced by large-cap tech stocks driving its success. This leads us back to the notion that the best investment action is often just getting started and maintaining your strategy even in tough times.

If you’re beginning with a mere $1,000, consider splitting it between an S&P 500 index ETF and a value ETF focusing on lower-cost stocks. If you’re already established, your best option could be investing solely in value ETFs to counterbalance the momentum of soaring growth stocks.

Before you decide on the Vanguard S&P 500 ETF, keep these thoughts in mind:

The Motley Fool has identified specific stocks, which they believe may yield better returns than the Vanguard S&P 500 ETF. These are worth exploring if you’re looking for potential growth.