S&P 500 Sell-Off: Top 3 Vanguard ETFs to Consider for Investment

Recently, the S&P 500 index has faced a dip into correction territory, with a decrease of 8.73% since mid-February. As we navigate through the current market landscape, fears of a recession are high, with nearly 60% of American investors expressing a pessimistic outlook for the next six months, based on a survey from mid-March.

While it's uncertain if a recession or bear market is on the horizon, there is a silver lining: this may present an excellent opportunity to purchase stocks at discounted prices. The market appears to be on sale right now, and several strong Vanguard exchange-traded funds (ETFs) are worth considering for investment.

1. Vanguard S&P 500 ETF

For those who prefer a safer investment approach, the Vanguard S&P 500 ETF (VOO) is a wise choice. This ETF tracks the S&P 500 index, encompassing the same stocks and aiming to reflect its long-term performance. The S&P 500 comprises shares of 500 of the largest U.S. corporations, many of which are well-established leaders capable of weathering challenging economic climates.

This ETF represents one of the more stable investments available, particularly in volatile periods. The S&P 500 index has successfully navigated numerous recessions, market crashes, and downturns over the last century.

2. Vanguard S&P 500 Growth ETF

If you seek an S&P 500 ETF with enhanced potential for returns, consider the Vanguard S&P 500 Growth ETF (VOOG). This fund includes stocks from the S&P 500 but specifically focuses on companies with high long-term growth potential.

The Vanguard S&P 500 Growth ETF strikes a balance between being a relatively safe investment and assuming some risk for higher growth. It consists of 209 stocks that are expected to experience faster-than-average growth. Despite being growth-oriented, it remains less risky compared to many other growth-focused ETFs, as all the companies are established within the S&P 500.

Over the past decade, this ETF has achieved an average annual return of 14.63%, compared to the 12.93% average return of the Vanguard S&P 500 ETF. Although the difference may seem minor, it can translate into significant financial gains over time.

3. Vanguard Information Technology ETF

The Vanguard Information Technology ETF (VGT) is tailored for those interested in the tech sector, featuring 314 stocks from various areas of technology. While it entails more risk due to less diversification, it has a robust track record of impressive returns.

This ETF has posted an average annual return of 19.76% over the last ten years. For instance, by investing $200 monthly, you could accumulate approximately $2.7 million in 30 years with this rate of return.

However, it's important to acknowledge that the tech sector often faces significant challenges during economic downturns. For example, the Nasdaq Composite index has fallen over 11% since mid-February. While the short-term outlook may be turbulent, this ETF has substantially outperformed the broader market over the long haul.

Currently, the Vanguard Information Technology ETF is priced around $560 per share, a decline from about $644 per share just a month ago. If you're open to taking on more risk in exchange for the potential for above-average returns, now might be an ideal time to invest in this tech-focused ETF.

In conclusion, while market sell-offs can be intimidating, they also present remarkable opportunities for savvy investors. Regardless of your investment choices, it's essential to maintain a long-term perspective and plan to hold onto your investments for several years. Historical trends show that the market has consistently recovered from even the most severe downturns.

Note: The information provided in this article is for informational purposes only and should not be considered financial advice.

S&P 500, Vanguard, ETFs