The past several months have delivered a sobering reality check to U.S. investors. After the S&P 500 (^GSPC -0.93%) reached its all-time high on Feb. 19, 2025, with a closing value of 6,144.15 and an intraday peak of 6,147.43, markets have experienced a significant pullback. This marked correction followed a period when major indices, including the Dow Jones Industrial Average (^DJI -0.87%) and Nasdaq Composite (^IXIC -1.20%), were all trading near record levels.
For investors with cash on the sidelines, however, this correction presents a potential opportunity. Historical data consistently shows that market pullbacks often create favorable entry points for those with patience and discipline. And among the thousands of available investment options, one exchange-traded fund (ETF) is particularly well-positioned for the current environment.
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The ultimate one-stop investment solution
The Vanguard Total Stock Market ETF (VTI -0.91%) represents one of the most efficient vehicles for capturing long-term equity growth available to individual investors. This comprehensive fund provides instant exposure to virtually the entire U.S. stock market through a single investment.
By tracking the CRSP US Total Market Index, this ETF holds positions in approximately 3,598 companies spanning all sectors, industries, and market capitalizations. This remarkable breadth eliminates the guesswork of trying to predict which stocks might outperform in an uncertain economic climate.
Unmatched cost efficiency
In challenging markets, investment costs take on even greater importance. This Vanguard fund shines in this respect with its industry-leading expense ratio of just 0.03%, meaning investors pay only $3 annually per $10,000 invested -- roughly 96% lower than the average among similar funds.
This cost advantage compounds dramatically over time. For example, an initial $100,000 investment growing at 8% annually (on average) would generate approximately $192,000 more in returns over 30 years compared to an otherwise identical fund charging the average expense ratio of 0.75%. For long-term investors, this mathematical reality alone makes a compelling case for this low-cost index approach.
A history of resilience
Since its 2001 launch, this total market fund has demonstrated remarkable resilience through multiple economic cycles and market disruptions. The broad diversification across thousands of companies provides a natural cushion against sector-specific downturns or individual company failures.
During the 2008 financial crisis, for instance, the fund certainly experienced a significant decline alongside the broader markets. However, investors who maintained their positions through the recovery were ultimately rewarded with substantial gains as the U.S. economy rebounded (see graph). A similar pattern emerged following the 2020 pandemic crash and subsequent recovery, underscoring the fund's attractiveness in an uncertain economic climate.
VTI Total Return Level data by YCharts
Why this fund makes particular sense now
The current market environment presents an ideal case for broad-based investing. With unpredictable shifts in trade policy potentially affecting different sectors in varying ways, investors face exceptional challenges in trying to identify potential winners and losers.
This total market fund elegantly solves this dilemma by providing exposure across the entire economic spectrum. As an example, if U.S. manufacturing benefits from protectionist policies, this fund should capture that growth through its industrial holdings. Meanwhile, its substantial technology, healthcare, and consumer positions ensure participation in other vital segments of the global economy.
A perfect core holding for any portfolio
Whether just beginning your investment journey or looking to streamline an existing portfolio, the Vanguard Total Stock Market ETF serves as an ideal foundation. Its comprehensive market coverage makes it suitable as either a stand-alone investment for those seeking simplicity, or as the centerpiece of a more sophisticated investment strategy.
For investors concerned about geographic concentration, this domestic total market fund pairs naturally with international offerings to create globally diversified exposure. This modular approach allows customized allocation while maintaining the exceptional efficiency that has become Vanguard's hallmark.
Seizing the opportunity
With this flagship Vanguard fund currently trading approximately 8.5% below recent highs, this sell-off scans as an attractive entry point for long-term investors. While near-term volatility may continue as markets digest the administration's evolving economic policies, the fund's comprehensive approach and minimal costs create a compelling formula for long-term success.
By embracing broad market exposure through this time-tested vehicle, investors can position themselves for the eventual recovery while avoiding the common pitfalls of market timing or speculative stock selection. In short, the Vanguard Total Stock Market ETF is an ideal vehicle for most nonprofessional investors, especially in a period characterized by political and economic uncertainty.
