Investing in VOO Vanguard SP500 ETF for Future Generations: A Long-Term Strategy

As a parent, you may be considering investing in VOO Vanguard SP500 ETF for the long-term, specifically for your children born in 2016 and 2012. But how sure are you that Vanguard Group and its ETFs will still exist and be relevant 30-40 years from now?

The Reliability of Vanguard as an ETF Issuer

According to Investopedia, Vanguard is the second-largest ETF issuer by Assets Under Management (AUM) with a staggering 2.36 trillion in AUM. Furthermore, Vanguard has a rich history of nearly 48 years at the time of writing. Based on Lindy's Law, which suggests that the longer an entity has existed, the longer it is likely to continue to exist, it would be reasonable to assume that Vanguard will still be around in 30 years. However, as the markets continue to evolve, the remaining relevance of the SP 500 as a representative of the market is a matter of debate.

Does the SP 500 Still Represent the Market?

The nature of the market is inherently changing, and the SP 500 may not continue to be a reliable benchmark in 30-40 years. The Nasdaq, for instance, has shown significant growth in technology and sector-specific ETFs. In the face of such changes, it is crucial to diversify your portfolio and consider other options that might become more relevant in the future.

Advice for Future Savings

According to wealth advisor AW Stites II, it is important to approach savings and investments with the intention of building a secure financial future for yourself first. Here are some key takeaways:

Save money for yourself and your family, not just for your children. Create a portfolio of stocks, bonds, and ETFs to diversify risk. Help your children only if they are financially secure, and then primarily through guidance and support. Teach your children about responsibility and the value of earning their own money. Consider investing in a broad-based ETF like VOO as a starting point, given its proven track record and diversification benefits.

Conclusion

While the future is uncertain, investing in VOO Vanguard SP500 ETF can provide a solid starting point for a long-term strategy. However, it is essential to consider market changes and adapt your strategy accordingly. The most important thing is to prioritize your own financial security and educate your children on financial responsibility. With these principles in mind, you can approach investing with confidence and set a positive legacy for future generations.

References: Investopedia. Largest ETF issuers by Assets Under Management (AUM). AW Stites II, Personal Communication.