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1 Simple ETF to Buy With $1,000 and Hold for a Lifetime


1 Simple ETF to Buy With $1,000 and Hold for a Lifetime

Picture this: You awake one morning to find $1,000 on your kitchen table. After thinking it over, you decide that investing the money is the right thing to do. But how? There are seemingly countless investment options to choose from, and you don't have the time to research them all.

In my opinion, there's an easy solution for any investor who wants to get started but also wants to keep things simple. Let me explain what that is.

It's true: Investing is a great way to build wealth. Yet, "investing in the stock market" can mean many different things. For example, it could mean:

My recommendation for any investor who wants to keep investing simple is to start with ETFs. Here's why.

ETFs are products that trade like stocks but operate like mutual funds. Their administrators build a basket of stocks, and when investors purchase shares of the ETFs, they gain exposure to many stocks at one time, and for a fraction of what it would cost -- in both time and money -- to assemble the full portfolio themselves.

What's more, many ETFs track well-established stock market indexes, like the S&P 500 or Dow Jones Industrial Average. These indexes are widely used benchmarks that are often quoted in financial and non-financial media alike. Moreover, they're often used as a proxy of how the economy is performing.

Over the last century, the S&P 500 has delivered a roughly 10% return year over year. That means that $1,000 invested in the S&P 500 has grown to over $17,000 after 30 years.

One simple ETF that can help anyone get started in the investing world is the Vanguard S&P 500 ETF (NYSEMKT: VOO).

This fund tracks the S&P 500, which is arguably the most widely cited stock market index in the world. Therefore, by investing in this fund, an investor is -- as much as anyone truly can -- "investing in the stock market." The return generated by this fund will very closely track the returns generated by the S&P 500.

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