Exchange-traded funds have become a rosy choice for cautious, long-term investors. The low-risk profile coupled with historically solid gains creates an attractive-looking profile. It’s not for everyone, of course, active day traders might vouch for stocks that offer consistent volatility rather than long-term stability. The Vanguard S&P 500 ETF (AMEX: VOO) is arguably the best low-maintenance investment for 2022, and it doesn’t take a lot of convincing to see why.
When it comes to passive accumulation, an S&P 500 ETF will boast the most attractive results. Less risky than other ETF’s, the S&P 500 shows a consistent bounce from brief downturns, mirroring the stock performance of the index itself. Sure, the Vanguard ETF took a plunge at the start of 2020 with the global economic pause, but sure enough, bounced back and continues to make record highs in the following months.
Whilst the S&P 500 isn’t known for being the best-performing out of Vanguard ETFs, its consistency is what makes it a great option for buy-and-hold investors. Perfectly situated between high levels of risk and poor reward, the S&P 500 ETF is a well-balanced long-term investment.
It’s often easy to judge stocks based on uncertainty, lack of financial transparency, the economic landscape, competition, and more. Yet when it comes to the S&P 500, It would be near on impossible to find an analyst with bearish persuasion. Bouts of economic downturns might threaten your immediate portfolio but economic growth always clears the part-time market debris. Some analysts argue that 2022 could see a stock market crash based on speculative theories regarding virus variants and inflation amongst others.
However, past experiences breed evolution – economies, institutions and individuals alike are learning to deal with the prospect of a pandemic environment, and hence any virus difficulty should be met with a little more preparation and thus less surprise in the markets.
Bearing in mind that no one knows what’s around the corner; current investment sentiment still resides on the side of caution. With the S&P’s historic returns standing at roughly 10% per year, investing in Vanguard’s ETF offers a somewhat stable slice of an incredibly lucrative stock index. Sure, a day trader might look at a 10% as a weak return, but it doesn’t require the legwork of meticulous investing. As we come towards the end of a tumultuous year, Vanguard’s S&P 500 ETF is looking like a promising stress-free long-term investment for 2022.
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Oliver is a financial writer and analyst specialising in the US stock market, with years of personal experience in understanding micro/macroeconomic structures, market trends and fundamental analysis.