The S&P 500 is down over 4% from the start of the year. While investors began the year with optimism, trade wars and tariffs have weighed on the outlook for the markets, for 2025 and beyond. It may seem like a bad time to invest right now.
However, investing when valuations have dropped can position you for better returns, particularly in the long run. That’s because, historically, the S&P 500 has averaged gains of around 10% per year. While there will be bad years along the way when the returns aren’t great, over the long run, you’re still likely to achieve considerable gains by remaining invested in the market.
If you have $50,000 that you can afford to invest into the stock market today, I’ll show you how that can turn to $1 million in the long run.
Make the most of your investment with this top ETF
If you’re investing a large lump sum, you’ll want to ensure that you’re putting that money into an investment that can generate good returns for you and also keep your money safe. While some investments may sometimes look attractive and have the potential to produce oversized returns, they usually come with considerable risks as well.
One exchange-traded fund (ETF) that can be an ideal place to invest $50,000 into today is the Vanguard Growth Index Fund ETF (VUG 0.60%). This Vanguard fund has a low expense ratio of 0.04%, which ensures that fees won’t take a big cut out of your returns over the years. What’s attractive about this ETF is that it tracks the largest growth stocks in the U.S. Eli Lilly, Visa, and tech giants including Microsoft and Nvidia are among its top 10 holdings.
There can be volatility in the fund, given that it focuses on growth stocks, and tech in particular accounts for nearly 58% of its holdings. Any time you’re heavily exposed to tech, there’s a risk that there will be bubbles and periods where the sector struggles significantly. But as long as you’re willing to stay the course and remain invested, the payoff can be worthwhile.
How the Vanguard fund could grow your investment to $1 million
Over the past decade, the Vanguard Growth Index Fund ETF has produced some incredible returns for investors. During that stretch, its total returns (which include dividends) have been north of 280%, far better than the S&P 500’s total returns of 228%. That averages out to a compound annual growth rate of 14.3% for the Vanguard fund and 12.6% for the S&P 500 — that is far higher than its long-run average of 10%.
^SPX data by YCharts.
Ideally, both the fund and index would continue growing at such fast rates into the future. But for the sake of being conservative, I’ll assume that things will slow down, and that the fund will grow at a much more modest rate of 9%. Setting up softer expectations can prevent you from being disappointed later on, especially if there happens to be a full-blown crash along the way. And when you’re talking about the long term, anything can certainly happen.
If your $50,000 investment grows by 9% per year, this is how your balance would look in the future.
| Growth of a $50,000 Investment | |
|---|---|
| Year | Investment Balance |
| 5 | $76,931 |
| 10 | $118,368 |
| 15 | $182,124 |
| 20 | $280,221 |
| 25 | $431,154 |
| 30 | $663,384 |
| 35 | $1,020,698 |
| 40 | $1,570,471 |
Calculations by author.
It would take 35 years for a $50,000 investment to get to $1 million. But if the market performs better and the VUG ETF averages higher returns than 9%, you would arrive at a $1 million portfolio balance much earlier than that.
Staying invested is key
The biggest challenge for investors these days may be to remain invested in the market, amid so much uncertainty and turmoil. What’s important to remember is that over the course of decades, a year or even a few years can still look like a relatively short time period.
If you’re in it for the long haul, you shouldn’t be discouraged with an economic outlook for the next few quarters or years. By putting your money into a top growth fund like the Vanguard Growth Index Fund ETF, you can set yourself up for some incredible long-term gains, regardless of how troubling the short term may look.
David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft, Nvidia, Vanguard Index Funds-Vanguard Growth ETF, and Visa. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
