A Quiet Look at Vanguard’s S&P 500

Newspaper and ETF

The Vanguard S&P 500 ETF. A rather unassuming name, isn’t it? It promises participation in the grand American enterprise, a slice of five hundred companies, each with its own quiet dramas. One imagines boardrooms and factories, ambition and disappointment, all distilled into a single share price. For a dividend hunter, it’s not about spectacular gains, but a steady, if modest, return – a small comfort in a world that rarely offers much of either.

The past twelve months have been… agreeable. A seventeen percent return, they say. A fleeting moment of prosperity. One almost hesitates to mention it, lest it vanish like a dream. It’s a reminder that even in the most predictable of investments, fortune remains a fickle companion.

Hoping for the Best, As One Always Does

There’s a certain comfort in the ETF’s decade-long performance – a 337 percent total return. A respectable figure, certainly. It speaks to the underlying strength of the American economy, or perhaps simply to our collective willingness to believe in it. Interest rates have been low, a gentle nudge to encourage borrowing and spending. It’s a delicate balance, this economic dance, and one wonders how long it can continue.

The so-called “Magnificent Seven” – these tech giants – have certainly played their part. They offer convenience, connection, and a constant stream of data. But even empires fade, and one can’t help but wonder if their dominance is built on something more substantial than fleeting trends. Their growth is impressive, of course, but it’s a rather concentrated power, isn’t it? A bit unsettling, perhaps.

And then there’s the rise of passive investing. More money flowing into index funds than actively managed ones. A curious phenomenon. It suggests a certain… resignation, a belief that beating the market is simply too much effort. Or perhaps it’s simply a more efficient way to participate. Either way, it adds fuel to the fire, a quiet momentum that’s difficult to ignore.

Preparing for the Worst, Though It May Not Come

But valuations, ah, valuations. The CAPE ratio, they tell us, is approaching levels not seen since the dot-com bubble. A rather alarming thought. It suggests that expectations have outstripped reality, that we’ve collectively convinced ourselves that prices can continue to rise indefinitely. It’s a dangerous game, this belief in perpetual growth.

The research from Invesco is rather sobering. A negative low-single-digit return over the next decade. It’s not a prediction, of course, just a statistical probability. But it’s enough to make one pause, to reconsider one’s assumptions. Howard Marks, a man who understands risk, suggests that credit opportunities might offer a better profile. He’s probably right, of course. He usually is.

Ending Up Somewhere in the Middle, As Is Often the Case

Predicting the future, even for a year, is a fool’s errand. Too many variables, too much uncertainty. The market is a capricious beast, easily swayed by emotion and rumor. I don’t expect another decade of fifteen percent annualized returns. Nor do I necessarily expect a crash. The truth, as always, will likely lie somewhere in between.

Over the long term, the S&P 500 has averaged around ten percent. A reasonable expectation, perhaps. But even that feels… optimistic. The world is a complicated place, and markets rarely cooperate with our expectations. One can hope for a steady return, a modest dividend, a small measure of security. But ultimately, one must accept that the future is unknowable. And that, in itself, is a rather melancholy thought.

2026-01-22 17:32

Hoping for the Best, As One Always Does

Preparing for the Worst, Though It May Not Come

Ending Up Somewhere in the Middle, As Is Often the Case

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