The Best Vanguard ETF to Invest in With $500 Right Now

January 20, 2026

The earlier investors begin their journey, the more favorable their returns are likely to be.
There’s really no need for investors to stress over pinpointing the ideal time to jump in.
The Vanguard S&P 500 ETF stands out as an excellent foundational stock to consider investing in today.
10 stocks we prefer over the Vanguard S&P 500 ETF ›

Many people might relate to the saying that the first step is often the hardest, and investing is no exception. Like a number of individuals, perhaps you’re waiting for that perfect moment to dive in. It’s completely natural to hesitate, especially if you don’t want to see your investment decrease in value soon after. With the stock market hitting near-record highs and speculation about overvaluations, it’s understandable to be a little cautious about starting your investment journey now.

However, the reality is that there rarely is a perfect time to invest. Sure, you could invest following a market dip or right before a surge, but accurately timing those moments is quite rare, even for seasoned investors. Research from JPMorgan shows that bull markets can often persist for extended periods. In fact, the S&P 500 reaches an all-time high on roughly 7% of trading days and doesn’t decline on about a third of those days.

If market overvaluation is a concern for you, I’d suggest not to dwell on it too much. A lot of metrics indicating overvaluation tend to look backward rather than forward, and we’re currently immersed in a significant technological shift. The rise of artificial intelligence (AI) is propelling impressive growth.

When considering revenue projections for 2026, major corporations like Nvidia, Alphabet, and Amazon may actually be attractively valued given their growth rates. Plus, the market’s makeup has shifted dramatically in recent years. Technology stocks now dominate much more than the traditional low-growth financial or cyclical stocks did. These tech companies often exhibit stronger business models and growth potential, justifying their higher valuations.

History tells us that starting your investment journey sooner rather than later generally results in better returns. The longer your investments are held, the greater the potential returns. Beginning with $500 is a fine starting point, but consistency is key to amassing long-term wealth. Regularly investing $500 each month—this practice is known as dollar-cost averaging—can mitigate the stress of timing your investments, plus it smooths out your returns over time.

Honestly, I believe ETFs (Exchange Traded Funds) are a smart entry point for new investors. The Vanguard S&P 500 ETF (NYSEMKT: VOO) is a solid choice.

In my view, the Vanguard S&P 500 ETF can be a crucial component of many investors’ portfolios. With a low expense ratio of just 0.03%, this fund tracks the S&P 500 index, which comprises the largest publicly traded companies in the U.S. It’s often seen as a gauge of the American stock market’s performance.

The S&P 500 is weighted by market capitalization, meaning larger companies have a bigger influence on the index. This has made the S&P difficult to outperform; in fact, only about 14% of actively managed funds have managed to do so over the past decade.

The performance of the Vanguard S&P 500 ETF has been impressive; it has averaged returns of approximately 14.8% annually over the previous ten years. In the last three years, those returns jump to nearly 23% annually. For instance, if you invest $500 monthly and achieve a 15% annual return for 30 years, you’d end up with roughly $2.8 million.

Before you decide to invest in Vanguard S&P 500 ETF shares, consider these points:

Based on recommendations from an analyst team, a collection of stocks was identified that might offer substantial returns in the coming years, and the Vanguard S&P 500 ETF wasn’t included among them.

Also interesting to note: if you had invested $1,000 in Netflix back when it was first recommended, you could be looking at $474,578 now! The same goes for Nvidia, where an investment of $1,000 from its recommendation would now be worth about $1,141,628.

It’s worth recognizing that the average return from the stock advisor service has been an impressive 955%, which significantly outpaces the S&P 500’s 196%. This could be a good incentive for someone looking for higher growth.

See 10 stocks »

*Please note that stock advisor services are set to resume on January 20, 2026.

JPMorgan Chase is an advertising partner. The analysis also includes potential positions in Alphabet, Amazon, and Vanguard S&P 500 ETFs. The company has a disclosure policy as well.

The Smartest Vanguard ETF You Can Buy Now for $500