The Vanguard Total Stock Market ETF (NYSEMKT: VTI) launched in May 2001 just as the tech bubble was going bust. It was one of the worst times to debut, but the fund’s strategy as an ultra-low-cost way to invest in the entire U.S. equity market was sound.
Since its inception, it’s still managed to produce an average annual return of roughly 9.4%. That means a $10,000 investment in the Vanguard Total Stock Market ETF has turned into more than $102,000 over its lifetime.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia. Continue »
The past quarter-century has demonstrated what the stock market can experience over long periods of time. The tech bubble proved to be a generational bear market. The financial crisis nearly took down the entire U.S. economy. The COVID-19 pandemic was about as unique a situation as you’ll encounter. And, of course, there were more garden-variety bear markets and corrections mixed in as well.
The next 20 years will have similar periods of high volatility. But the U.S. stock market is still likely to deliver strong returns when all is said and done.
If the Vanguard Total Stock Market ETF were to average 9.4% annually again through 2046, a $10,000 investment would turn into about $60,300. At the S&P 500‘s (SNPINDEX: ^GSPC) long-term annual return of 10%, the ending balance would be roughly $67,300.
Or returns could be more modest. Vanguard’s own forecast for the next decade calls for a potential range of returns of 4.8% to 6.8%. If the Vanguard Total Stock Market ETF earns 5.8% per year over the next two decades, the midpoint of that range, that $10,000 would grow to around $30,900.
With such strong returns over the past several years, the potential range of returns looking forward might be pretty wide. But if history is any guide, long-term buy-and-hold investors in U.S. stocks are likely to still do well.
Should you buy stock in Vanguard Morningstar Total Stock Market ETF right now?
Before you buy stock in Vanguard Morningstar Total Stock Market ETF, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Vanguard Morningstar Total Stock Market ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.