Prediction: This Brilliant ETF Will Crush the S&P 500 Over the Next 20 Years
Value stocks and small-caps could be ready for the spotlight. This low-cost index fund lets you own 834 of these stocks in one ETF.
Overview
One of the biggest questions facing the stock market right now is: Can the bull market continue? The S&P 500 index of the 500 largest publicly traded companies in America has been a great investment in recent years. The Vanguard S&P 500 ETF (NYSEMKT: VOO) has delivered annualized returns of about 15% for the past 16 years.
But can this winning streak for U.S. large-cap stocks keep going? Some investors worry that the S&P 500 has gotten too top-heavy with major tech stocks -- too much of a concentrated bet on the artificial intelligence (AI) boom, with not enough margin for error. Metrics like the Shiller CAPE ratio are also flashing ominous warning signs that today's S&P 500 might be overvalued and due for a downturn.
Details
No one knows for sure what will happen next. The S&P 500 might go into a short-term sell-off, suffer a serious crash and a long bear market...or keep growing strong for years to come. But Vanguard research suggests that large-cap stocks and growth stocks (like the ones that are such a big part of today's S&P 500) might not be the best investments for the next 20 years.
Source
Originally published at www.fool.com.