Should You Buy the Vanguard S&P 500 ETF With the Stock Market at An All-Time High? History Offers a Clear Answer.

• The diversified quality of the S&P 500 scale has fueled a compound yearly instrumentality of 10.5% for investors since 1957.

• The scale offers vulnerability to the companies driving the artificial quality (AI) boom, successful summation to banks, healthcare companies, and more.

• The Vanguard S&P 500 ETF tin assistance investors way the show of the S&P 500, with precise debased holding costs.

• 10 stocks we similar amended than Vanguard S&P 500 ETF ›

The S&P 500 (SNPINDEX: ^GSPC) scale is made up of 500 companies from 11 antithetic sectors of the economy. It's weighted by marketplace capitalization, truthful its largest constituents -- which see artificial quality (AI) powerhouses similar Nvidia and Alphabet -- person a overmuch greater power implicit its show than the smallest.

The S&P 500 acceptable a caller grounds precocious past Thursday connected the backmost of a 16% summation successful 2025 truthful far, which is good supra its mean yearly instrumentality since it was established successful 1957. Accelerated returns person been communal implicit the past fewer years, arsenic AI fuels singular maturation successful the semiconductor, software, and unreality computing industries, and this dynamic is apt to persist for the foreseeable future.

The Vanguard S&P 500 ETF (NYSEMKT: VOO) is simply a low-cost exchange-traded money (ETF) that tracks the show of the S&P 500. Should investors bargain it with the scale astatine an all-time high? History offers a wide answer.

Information exertion is the largest of the 11 S&P 500 sectors, with a weighting of 36.1%. The assemblage is location to 3 of the world's largest companies, Nvidia, Microsoft, and Apple, which person a combined marketplace headdress of $11.9 trillion, truthful its dense power isn't a surprise. Those 3 companies, on with galore others successful this sector, run astatine the forefront of the AI revolution.

The S&P 500 has climbed by 78% since the opening of 2023, which is erstwhile the AI roar started gathering momentum. But if we exclude the accusation exertion sector, that instrumentality shrinks to conscionable 52%, which genuinely highlights its significance.

The fiscal assemblage is the 2nd largest successful the S&P 500, with a weighting of 12.9%. It's location to Warren Buffett's trillion-dollar conglomerate Berkshire Hathaway, successful summation to the world's biggest concern slope JPMorgan Chase, and outgo giants Visa and Mastercard.

The user discretionary assemblage is third, with a weighting of 10.5%, acknowledgment to tech-adjacent AI companies similar Amazon and Tesla. Then determination is the connection services assemblage astatine 10.1%, which hosts different AI powerhouses similar Meta Platforms and Alphabet.