Reuben Gregg Brewer, The Motley Fool

Thu, May 22, 2025, 2:15 AM5 min read

• The stock market has gone through a correction and rebounded.

• The S&P 500 index remains at elevated levels, and it avoided falling into a bear market.

• The Vanguard 500 Index ETF is still one of the best places to invest today.

• These 10 stocks could mint the next wave of millionaires ›

If you have $100 to invest, what should you do with it? There are a host of answers, but the simplest solution is to buy the Vanguard S&P 500 ETF (NYSEMKT: VOO). That's the equivalent of saying you should buy the market, which is the advice that superstar investor Warren Buffett has long given.

But should you do that right now, with so much uncertainty at the moment and the market trading less than 5% from all-time highs? Yes, and here's why.

The stock market goes through different phases, generally referred to as bull markets and bear markets. All those two terms really mean is that the market, over time, trends upward (bull) and downward (bear).

Currently, it's in a bull market, although it's been a particularly volatile one thanks to geopolitical turmoil and economic worries. And the volatility may not be over yet.

What is pretty clear, however, based on previous time periods that have mimicked this one, is that this period of volatility wasn't all that severe. There were a few months of poor performance, but the stock market is already nearly back to where it was before the decline started. The short-term pullback has done little to change the lofty valuations currently afforded to many stocks.

That means that investors looking to put money into the market today are still likely paying a premium price, and that's not necessarily ideal. But if you think in decades and not days when it comes to your investment choices, the longer-term history of the market is pretty clear: Buying an S&P 500 (SNPINDEX: ^GSPC) index fund like the Vanguard ETF referenced above is a winning long-term strategy. That remains true even if you buy when the market is expensive.

The truth is, if you buy the Vanguard S&P 500 ETF today, you could end up losing money in the near term. But that same statement would be true no matter when you bought the exchange traded fund (ETF). It would be true if you bought an individual stock or a mutual fund. The market goes up and down all the time.

Yet there's one trend that has seemed to hold true over longer time periods -- that the market generally heads higher over the long term. While you may lose money in the short term if you buy this Vanguard ETF and you stick with the investment, you're highly likely to end up with gains.