Investing in the S&P 500, an index of the 500 leading stocks on U.S. markets, has historically yielded solid returns.
It has averaged an annual return of around 10% for decades
At that kind of return, you would expect your investment to double roughly every seven years. An exchange-traded fund (ETF) such as the Vanguard S&P 500 ETF (NYSEMKT: VOO) can be a potentially ideal long-term investment, as it tracks the S&P 500 while charging minimal fees — its expense ratio is just 0.03%. It can be a suitable option to allocate a large amount of money to, as it’s a much safer option than investing in individual stocks.
But just how big could a $50,000 investment in a fund that tracks the S&P 500 grow to be worth in 25 years? Let’s take a look. Why forecasting future returns can be challenging Although the S&P 500 has averaged a 10% return for the long haul, there have been periods where investors have earned far less than that.