The S&P 500 (^GSPC 0.61%) dropped into bear-market territory in January 2022, but the index has rebounded sharply in 2023, and history says it's likely heading even higher. The S&P 500 was up more than 20% from its bear-market low when trading stopped on June 6, a threshold that some investors see as the beginning of the next bull market. Others say the S&P 500 needs to hit a new high before the bear market officially ends, but crossing the 20% threshold is a big deal regardless.

Since 1950, whenever the S&P 500 has climbed 20% from its 52-week low, the index has gone on to produce an average return of 17.7% over the next 12 months, according to Carson Investment Research.

Of course, past performance is no guarantee of future results, but investors would still be wise to buy a few shares of Amazon (AMZN 1.16%) and the Vanguard S&P 500 ETF (VOO 0.59%) right now. Here's why.

Amazon

Warren Buffett believes a sustainable competitive advantage is the most important quality a company can have. Companies that have a competitive advantage are well positioned to outperform their peers and generate market-beating returns for shareholders. Amazon is a great example. It has a strong presence in three growing industries -- e-commerce, cloud computing, and adtech -- and the company has established a durable moat in all three areas.

Amazon operates the most popular online marketplace in the world. In fact, it receives nearly four times as many visitors each month as its closest competitor. That hints at immense brand authority and a powerful network effect. Merchants are basically obligated to sell on Amazon due to its popularity, and the marketplace becomes more appealing to consumers as more sellers participate. But Amazon has reinforced that advantage by constructing a massive logistics network that supports fulfillment services for merchants and fast delivery for buyers. That logistics infrastructure makes its marketplace even more compelling.

Amazon also runs the most popular cloud computing platform in the world. Amazon Web Services (AWS) accounted for 32% of cloud infrastructure and platform services (CIPS) in the first quarter, meaning its market share rivals that of Microsoft Azure and Alphabet's Google Cloud Platform combined. Research company Gartner says AWS has the "greatest breadth and depth of capabilities of any provider in the market for CIPS." That hints at an unparalleled capacity for innovation, a quality that should keep AWS on the cutting edge of cloud computing for years to come.

Finally, Amazon is the third-largest digital advertising business in the world, and it is gaining ground on industry leaders Google and Meta Platforms. That success stems from the popularity of its marketplace. The millions of consumers that visit Amazon each day make the platform an ideal place for brands to run ad campaigns. Amazon capitalizes on that by providing ad tech tools to ad buyers and publishers.

Here's the bottom line: Industry experts expect all three markets -- e-commerce, cloud computing, and ad tech -- to grow by roughly 14% annually through 2030, meaning investors can conservatively expect Amazon's revenue to increase by 14% per year during that time. That makes its current valuation of 2.5 times sales look cheap. That's why this growth stock is worth buying today.

Vanguard S&P 500 ETF

As mentioned above, history says the S&P 500 could rise about 18% during the next year, and buying shares of the Vanguard S&P 500 ETF is one of the most logical ways to capitalize on that possibility. But the promise of near-term gains pales in comparison to the long-term benefits of owning an S&P 500 index fund.

First, the Vanguard S&P 500 ETF offers broad diversification without the hassle of researching individual stocks. It spreads capital across 500 blue chip American businesses, and its constituents span all 11 market sectors.

Second, the Vanguard S&P 500 ETF is a proven moneymaker. The benchmark index produced a total return of 552% over the last two decades, or 9.82% annually. At that pace, $125 invested weekly would be worth $1 million after three decades.

Third, the Vanguard S&P 500 ETF is a low-cost investment option that will likely outperform most professional money managers over the long term. In fact, less than 9% of large-cap funds beat the S&P 500 over the past decade, and investors can buy a slice of that outperformance for a fraction of what a professional money manager would charge. The Vanguard S&P 500 ETF bears a below-average expense ratio of 0.03%, meaning investors would pay just $3 per year on a $10,000 portfolio.