Investors are eyeing the stock market, with hopes for growth continuing into 2026. Recent years have seen significant gains, yet questions surrounding the safety of investing during peak market levels abound. Historically, stock market participation has proven to be a reliable method for building wealth, especially when maintaining a diversified portfolio over the long term.
However, the specter of market crashes looms large, leaving lasting impressions on investors. As the market reached new heights once more in 2025, many individuals wonder whether now constitutes a prudent moment to venture into equities.
Stock market crashes are unpredictable but often followed by swift recoveries. For instance, the onset of the COVID-19 pandemic in 2020 caused a dramatic downturn, only to be overcome by a remarkable recovery that boosted the S&P 500 by 16% for the year. A similar incident occurred in April of this year, sparked by tariff announcements which briefly rattled investor confidence and resulted in a quick sell-off. Despite these jitters, the S&P 500 bounced back once again, gaining another 16% in 2025.
Such rapid recoveries are atypical, underscoring why long-term investment strategies are generally favored. The unpredictability inherent in market fluctuations highlights the advantage of maintaining a steady investment approach rather than attempting to time the market.
Prominent investors emphasize the futility of timing the market. Peter Lynch famously pointed out that significantly more wealth has been lost by those anticipating corrections than in the corrections themselves. Similarly, John Bogle criticized the idea that any signals reliably indicate the right moments to enter or exit the market. Benjamin Graham and Charlie Munger echoed these sentiments, emphasizing that long-term holding is the key to successful investing.
For those feeling uncertain about entering the market, exchange-traded funds (ETFs) can provide an accessible and efficacious means to invest. One attractive option is the Vanguard S&P 500 ETF (VOO), which closely tracks S&P 500 performance. With a remarkably low expense ratio of 0.03%, it stands out as a sensible choice for maintaining exposure to the broader market.
Over the past decade, this ETF has surged approximately 300%, transforming a $10,000 investment into nearly $40,000—an average compound annual growth rate of around 14.7%. This impressive return incorporates periods of market volatility, demonstrating the importance of staying invested.
The overarching message for prospective investors is clear: there’s no wrong time to engage with the stock market, particularly for those who plan to maintain their investments over the long haul. As long as one is financially capable, investing in a reliable index fund like the S&P 500 can be a sound strategy for building wealth.
