Should You Buy the Vanguard S&P 500 ETF Right Now or Wait for a Stock Market Correction?

Motley Fool05-02

The S&P 500 is less than 3% away from its all-time high, making some investors hesitant to buy an index fund. There’s no way to time a correction, and even if you buy at the highs, you’ll ...

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Is now a good time to invest?","collect":0,"end_time":0,"defaultTopTitle":"fool.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"OEF":"标普100指数ETF-iShares","BK4588":"碎股","BK4550":"红杉资本持仓","SPXU":"三倍做空标普500ETF","FDN":"First Trust Dow Jones Internet I","UPRO":"三倍做多标普500ETF","SPY":"标普500ETF","BK4581":"高盛持仓","BK4504":"桥水持仓",".SPX":"S&P 500 Index","OEX":"标普100","BK4585":"ETF&股票定投概念","IVV":"标普500指数ETF","BK4534":"瑞士信贷持仓","SSO":"两倍做多标普500ETF","SDS":"两倍做空标普500ETF","VOO":"Vanguard标普500ETF","SH":"标普500反向ETF","BK4559":"巴菲特持仓"},"translate_title":"你应该现在购买先锋标普500 ETF还是等待股市调整？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"VOO":1,"SPY":1,"FDN":1,".SPX":1,"IVV":0.6,"UPRO":0.6,"SSO":0.6,"SPXU":0.6,"SH":0.6,"SDS":0.6,"OEX":0.6,"OEF":0.6,"ESmain":0.6},"content_text":"The S&P 500 is less than 3% away from its all-time high, making some investors hesitant to buy an index fund.\n\n\n\n\n\n\n\nThere’s no way to time a correction, and even if you buy at the highs, you’ll likely do fine over the long run.\n\n\n\n\n\n\n\nDollar-cost averaging could be a far better strategy, no matter what the market is doing.\n\nThe Vanguard S&P 500 ETF (VOO -0.33%) is one of the best ways to invest in the S&P 500, which has been a pretty smart strategy over the long term. Since 1965, the S&P 500 has produced a total return of 10.2% annualized. The Vanguard ETF has an expense ratio of just 0.03%, so you get to keep most of your gains.While there's no guarantee that the S&P 500 will achieve the same level of performance in the future, it has historically produced 9%-10% annualized returns over most multidecade periods. Having said that, the S&P 500 isn't too far from its all-time high (as of this writing), so it's natural for investors to wonder whether now might be a good time to buy shares in an S&P 500 index fund or if it would be smarter to wait for a better opportunity.Just under an all-time highThe S&P 500 and several other major stock indices have reached all-time highs this year and remain close to record levels. In the case of the S&P 500, the index is less than 3% below its all-time high, as of April 29.^SPX data by YCharts.Should you wait for a correction?One important thing for all investors to learn is that timing the market is impossible. And quite frankly, it's unimportant if you're investing in a high-quality S&P 500 index fund for the long term. Even if you buy at a market peak, your long-term returns should likely be excellent.For example, let's say you invested in the S&P 500 at its peak in 2007 -- just before the financial crisis sent the market plunging. By the time the S&P 500 bottomed in early 2009, it had lost about 50%. So this would seem like a pretty awful time to invest.However, you might be surprised to learn that if you had invested in an S&P 500 index fund at the worst possible time before the 2008-2009 financial crisis, you would be sitting on a 355% total return today. If you look at the chart below, the actual 2008-2009 stock market crash barely looks like a blip over the long run. And that's the point.^SPXTR data by YCharts.It's also worth noting that just because the S&P 500 is near an all-time high doesn't mean it can't go even higher. Many people were \"waiting for a correction\" in the 2014-2015 time frame after a long post-financial crisis rally and never got one.A better strategyHaving said that, the best way to invest in S&P 500 ETFs is a little at a time, not all at once.One excellent strategy is to invest equal amounts of money at certain intervals. This is known as dollar-cost averaging, and mathematically, it guarantees that you'll buy more shares when prices are lower and fewer shares when prices are high.As a basic illustration of this, let's say you plan to invest $1,000 in the Vanguard S&P 500 index fund every three months. Right now, the fund is trading for approximately $470 per share, so assuming your broker allows you to buy fractional shares, you'd buy 2.13 shares of the index fund.Now let's say that a market correction comes, and the share price of the fund falls to $430 by the time you're ready to make another investment. This time, your $1,000 investment will buy 2.33 shares.The bottom line is that by averaging into a fund like the Vanguard S&P 500 ETF, you're going to get a favorable average share price over time. A strategy like this is a far better way to invest than trying to decide whether to invest a lump sum now or later.","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2432273636"}