This 1 ETF Is My Top Recommendation for New Investors

The stock market can be intimidating even when it's thriving, but it's especially daunting to invest during periods of volatility.

Stock prices have been shaky over the past several months, but the good news is that now is a fantastic time to buy. When stock prices are lower, you can get more bang for your buck by investing in high-quality stocks at a discount.

While everyone's investing preferences will be different, there's one type of exchange-traded fund (ETF) that's a particularly good fit for new investors and can help keep your money safer: The S&P 500 ETF.

Why invest in an S&P 500 ETF?

An S&P 500 ETF, such as the Vanguard S&P 500 ETF (VOO -0.41%) or iShares Core S&P 500 ETF (IVV -0.42%), is a fund that tracks the S&P 500 index. In other words, it includes the same stocks as the index itself and aims to mirror its performance.

Because you can't invest in the S&P 500 index itself, this type of ETF is the next best thing. It includes stocks from 500 of the largest and strongest companies in the U.S., including household names like Amazon, Apple, and Tesla.

One of the primary advantages of an S&P 500 ETF is that it's extremely likely to recover from market downturns. All investments are subject to short-term volatility, but the S&P 500 itself has a decades-long history of recovering from even the worst crashes, bear markets, and recessions.

While there are never any guarantees when it comes to investing, it's almost certain the index will continue rebounding from future slumps as well. And because the S&P 500 ETF tracks the index, it will recover, too.

Another advantage of an S&P 500 ETF is that it's incredibly low maintenance. With just one fund, you'll own hundreds of strong stocks across a wide variety of industries, creating an instantly diversified portfolio.

You also never need to worry about researching companies or deciding when to buy or sell a stock. All you have to do is invest as much as you can afford, then let the fund take care of the rest.

How much can you earn with this type of investment?

Despite this being one of the safer types of investment, it's possible to make a lot of money with an S&P 500 ETF over time.

Historically, the index itself has earned an average rate of return of around 10% per year. This doesn't necessarily mean you'll earn 10% returns consistently year after year, as the market will always experience some degree of volatility in the short term. Over time, though, the annual highs and lows should average out to around 10% per year.

Say you're investing $200 per month in an S&P 500 ETF earning an average return of around 10% per year. Here's approximately how much you can earn depending on how many years you invest.

Source: Author's calculations via Investor.gov.

Even if you have little investing experience and can't afford to invest thousands of dollars per month, it's still possible to make a lot of money -- and potentially even become a millionaire -- with S&P 500 ETFs. The key is to start now and continue investing for as many years as possible.

Investing in the stock market isn't always easy, especially if you're just getting started. But S&P 500 ETFs are a fantastic beginner-friendly option. Not only can they protect your investments during downturns, but they can also help you make a lot of money over time.