The stock market looks unstoppable these days. The S&P 500 has been flying high again in 2026, rising by around 13% as of Tuesday’s close. It’s hit record highs, with plenty of excitement still in the air, centering around tech stocks and, in particular, artificial intelligence.
Many investors, however, may be growing concerned that with the S&P 500 being on track for a fourth consecutive year of outperforming its long-run average return of about 10%, it may be due for a pullback. And if that’s the case, perhaps other investments may make more sense, such as tracking the entire market through an exchange-traded fund (ETF).
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Are S&P 500 index funds still worth investing in, or are investors better off investing in funds that provide exposure to the entire stock market? Let’s take a look.
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The S&P 500 may be risky these days, but not necessarily over the long term
For multiple years now, there have been concerns about rising valuations and whether the stock market may crash. The topic inevitably comes up when stocks are rising rapidly.
The problem is that trying to predict crashes and trying to time the market is next to impossible. Rallies can go on indefinitely, and sky-high valuations can reach new heights. That’s why a buy-and-hold strategy can make a lot of sense for investors. Tracking the S&P 500, an index of leading stocks on U.S. markets, has generally been a good move for investors over the long haul. While there will be crashes along the way, remaining invested can still be a good move.
The Vanguard S&P 500 ETF (NYSEMKT:VOO) gives investors exposure to the index while charging a low expense ratio of only 0.03%, making it appealing for long-term investors. Over the past five years, it has delivered total returns (including reinvested dividends) of around 87% — and that’s even if investors held on during the 2022 crash, when the S&P 500 nosedived more than 19%.
The S&P 500 has always recovered from every market downturn. It’s batting 100%. And even if there is a crash in the near future, as long as investors are willing to hang on for the long haul, simply tracking the index through an ETF such as VOO can be a practical option.
