The S&P 500 has slipped about 3% from its new record high on Oct. 6, and that drop is enough to put the Vanguard S&P 500 ETF back on the radar for one simple reason: the next bigger dip could be a buying chance. If the market falls 20%, the plan is to add more to a fund that spreads money across 505 stocks instead of hinging on a handful of names.
That is why investors searching for the Nasdaq 100 today are running into a broader question about where a crash might leave them. The Vanguard S&P 500 ETF holds Nvidia and Alphabet, but it also holds JPMorgan Chase and Eli Lilly, giving it a mix that is less dependent on AI optimism than a tech-heavy index. In a market that has been shaken by doubts about AI stocks, that balance matters.
The case for buying the S&P 500 through an ETF is rooted in simple math. An investor who bought the index in 1928 would have earned average annual returns of 9.98% for the next 98 years. VOO, the Vanguard S&P 500 ETF, has delivered average annual returns of about 14.8% over the past 16 years since it began trading. Those figures do not make the fund immune to losses, but they do show why long-term investors keep treating broad market weakness as something to use, not fear.
That is also where the friction sits. The S&P 500 can still lose value in a crash or bear market, and the most recent one came in 2022. Yet the broader stock market has never gone to zero, which is why a 20% decline would not necessarily be a warning to step away. It could be the point at which a diversified fund becomes more attractive, even if the ride gets rough before it gets better.
The unresolved question is not whether the market can fall; it can. The question is whether it will get far enough from here to trigger that 20% mark, and if it does, long-term buyers will already know what they want to own.
