Is Now a Safe Time to Buy the Vanguard S&P 500 ETF? History Has an Answer

Owning a low-cost index fund may look like one of the simpler ways to check up on your financial health, but buying feels harder when the headlines are full of reasons to wait. Geopolitical tensions, AI disruption fears, and uncertain rate-cut timing have kept many investors on the sidelines in 2026.

The Vanguard S&P 500 ETF (NYSEARCA:VOO) has delivered a 10-year annualized return of approximately 15.68% through mid-2026 despite a pandemic, an inflation spike, and a banking crisis along the way. The long-term data, the cost of market timing, and the risk of waiting all point in the same direction.

VOO tracks the S&P 500 for an expense ratio of 0.03%

The Vanguard S&P 500 ETF holds all 500 companies in the index, charges an expense ratio of 0.03%, and crossed $1 trillion in assets under management in early June 2026, as reported by InvestSnips. So, the fund costs roughly $3 a year for every $10,000 invested.

VOO has delivered an average annual return of 15.01% since its September 2010 inception, as tracked by Stock Analysis. You get broad exposure to the largest U.S. companies through a single purchase, with quarterly dividends reinvested along the way.

The 10-year annualized return sits at approximately 15.68%

VOO has returned 15.68% per year on a 10-year annualized basis through mid-2026 with dividends reinvested, as documented by InvestSnips. A $10,000 investment made 10 years ago would have grown to more than $40,000 over that stretch.

The decade included a global pandemic in 2020, an inflation surge to 40-year highs in 2022, and a regional banking crisis in 2023. Your portfolio would have endured all three and still compounded at better than 15% annually.

Only three rolling 10-year periods since 1926 produced a negative return

The S&P 500 has delivered positive returns in nearly every rolling 10-year period since 1926, with only three exceptions in 94 years of data, as highlighted by Ben Carlson's analysis cited by Crews Bank. The average annual return across all 10-year stretches was approximately 9.2%.

Every rolling 20-year period in S&P 500 history has been positive, with the worst producing approximately 6% annualized and the best exceeding 17%, as noted by My ETF Journey. The longer your holding period, the more the historical odds move in your favor.

The average intra-year decline is 14.2%, yet most years end positive

The S&P 500 experienced an average intra-year decline of 14.2% while still posting positive annual returns in 35 of 46 years, according to J.P. Morgan's Market Insights. Drops of 5% or more occurred in the vast majority of calendar years.

While market volatility naturally creates anxiety, historically, selling during a downturn has been the wrong move in most calendar years, regardless of how severe the decline seemed at the time.

Missing just 10 of the best trading days cuts returns roughly in half

J.P. Morgan Asset Management's analysis shows that staying fully invested in the S&P 500 over the 20-year window ending July 2024 produced an annualized return of 10.5%. The damage from missing even a small number of the best days is severe.

• Fully invested over 20 years produced a 10.5% annualized return.
• Missing the best 10 days reduced the return to 6.2%.
• Missing the best 20 days dropped it to 3.6%.
• Missing the best 30 days left just 1.4%.

Six of the 10 best days occurred within two weeks of the 10 worst

Jack Manley, global market strategist at J.P. Morgan Asset Management, told CNBC in April 2026 that six of the market's 10 best days over the past two decades occurred within two weeks of the 10 worst days, as reported by TheStreet.

Pulling your money out during the scariest stretches almost guarantees you miss the strongest rebounds. The best days and the worst days tend to arrive together, and you are unlikely to capture one without enduring the other.

The 2026 wall of worry has not derailed the long-term trend

Geopolitical tensions in the Middle East, concerns about AI displacing jobs, and an extended wait for interest rate cuts have all contributed to investor anxiety in 2026. The S&P 500 has returned roughly 8% year to date through late July despite those headwinds.

Every year brings its own set of worries, and the market has historically climbed through most of them. The pandemic of 2020, the inflation spike of 2022, and the banking scare of 2023 all felt like reasons to sell, yet each became irrelevant in the return data.

Dollar cost averaging removes the pressure of picking the right entry point

Investing a fixed amount at regular intervals regardless of market conditions is one way to manage the discomfort of buying during uncertain times. Dollar cost averaging means you buy more shares when prices are low and fewer when prices are high, smoothing out your cost over time.

The approach has historically produced returns close to the long-term average when applied over 15-plus year periods, as noted by My ETF Journey. You do not need to pick the bottom to benefit from the market's long-term upward trend.

Bottom line

The historical record for the S&P 500 is difficult to argue against over long holding periods. Only three rolling 10-year stretches since 1926 produced a loss, and every rolling 20-year period ended positive. VOO has compounded at roughly 15.68% annually over the past decade through a pandemic, inflation, and a banking scare.

The decision to start investing or add to an existing position may feel difficult given the headlines, but history suggests that time in the market has consistently mattered more than timing it. Missing just 10 of the best trading days cuts returns nearly in half, and those best days tend to arrive during the stretches that feel most uncomfortable.

This article is for informational purposes only and should not be considered investment advice.

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