Key Points
-
Dollar-cost averaging stops you from trying to time the market because your buying schedule is already set.
-
The S&P 500 has averaged 10.6% annual total returns over the past 30 years.
-
The Vanguard S&P 500 ETF can be a passive, one-stop shop for long-term investors.
Dollar-cost averaging, a strategy where investors regularly invest a fixed amount, can help mitigate market timing risks. For example, with a consistent investment of $1,000 monthly in an S&P 500 ETF, one can potentially reach $1 million, depending on the investment amount.
Based on an average annual return of 10% for the S&P 500, here are the estimated years until reaching $1 million with varying monthly investments: $250 requires 38 years, $500 takes 31 years, $1,000 takes 24 years, and $2,000 takes 18 years. Investing in a low-cost ETF like the Vanguard S&P 500 ETF, with a 0.03% expense ratio, can offer a diversified approach to long-term growth.
5 Stocks Our Experts Predict Could Double In the Next Year
By submitting your email, you'll also get a free pivot & flow membership. A free daily market overview. You can unsubscribe at any time.
