VOO is a simple "one-stop" stock investment that lets you own a piece of 500 of the biggest U.S. companies, making it easy for beginners to grow wealth over the long term.
Understanding the basics of America's most popular index fund
VOO is an ETF (exchange-traded fund) from Vanguard that tracks the S&P 500, an index of about 500 large U.S. companies like Apple, Microsoft, and Amazon.
When you buy one share of VOO, you are indirectly buying very small slices of all those companies at once—instant diversification in a single purchase.
Because it is "passively" managed (it just follows the index instead of trying to pick winners), it is designed to be a long-term, low-maintenance investment.
VOO is built to follow the overall U.S. stock market (through the S&P 500) rather than trying to beat it, which keeps costs low and the strategy straightforward. It's the "set it and forget it" approach to building wealth.
Low costs, diversification, tax efficiency, and ease of use
Spreading Out Your Risk
Historical performance and concrete return examples
VOO pays quarterly dividends, which you can reinvest. Reinvesting dividends is a major driver of compounding over many years—this is how wealth really builds!
Key Insight: Over the last 15 years, VOO had positive returns in 13 out of 15 years. This is why a buy-and-hold investor benefits from staying invested through both good and bad years.
A real-world example of long-term investing
Thanks to both price gains and dividends compounding over ~9 years
VOO = whole market • Sector ETFs = one slice of the market
| ETF (Focus) | What it Owns | 10-yr Return | Typical Drawdowns | Expense Ratio |
|---|---|---|---|---|
|
VOO
VOO
|
500 large U.S. companies (all sectors) | ~13-14% | Moderate (~-20%) | 0.03% |
|
VGT
Tech ETF
|
Mostly technology stocks | ~18-19% | Larger, sharper drops | ~0.10% |
|
XLE
Energy ETF
|
Oil & gas companies | ~5% | Very large swings | ~0.09% |
|
XLF
Financials ETF
|
Banks, insurers, financial firms | ~10% | Bigger sector drops | ~0.09% |
VOO can drop 20% or more in a bad year—this is normal equity-market volatility, not a flaw
Years is the key time horizon. If investing for retirement, drops are usually temporary bumps along an upward trend
The best strategy is to hold through both good and bad years. Time in the market beats timing the market
Simple, proven strategies for long-term wealth building
Many investors use VOO as their core holding—buy regularly, reinvest dividends, and hold for decades.
Invest a set amount every month or paycheck. This smooths out the price you pay and reduces "timing" stress.
VOO fits especially well in IRAs, 401(k)s, and taxable accounts for passive investors.
Understanding how and when the index changes
Four times a year—March, June, September, December. Changes become effective on Monday after the third Friday.
Changes can happen anytime for mergers & acquisitions, spin-offs, or bankruptcies.
| Quarter | Effective Date | Added | Removed | Context |
|---|---|---|---|---|
| Q1 | March 24, 2025 |
DoorDash (DASH)
TKO Group (TKO)
Williams-Sonoma (WSM)
|
Companies with shrinking market caps | DoorDash met profitability criteria after years of revenue growth |
| Q3 | Sept 22, 2025 |
AppLovin (APP)
Robinhood (HOOD)
Emcor Group (EME)
|
MarketAxess (MKTX)
Caesars (CZR)
Enphase (ENPH)
|
AppLovin & Robinhood saw massive stock rallies in 2025 |
| Q4 | Dec 22, 2025 |
CRH plc (CRH)
Carvana (CVNA)
Comfort Systems (FIX)
|
LKQ Corp (LKQ)
Mohawk (MHK)
Solstice (SOLS)
|
Carvana rebounded from near-bankruptcy to profitability |
When a stock is added, every ETF like VOO must buy it immediately, creating temporary demand surge and price "pop."
When stocks are removed, index funds are forced to sell their shares, creating downward pressure on the stock price.
S&P announces changes ~2 weeks early, so active traders often try to "front-run" by buying additions early.
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Subscribe NowFollow these simple steps to begin your investing journey with VOO
Choose a low-cost broker like Fidelity, Schwab, or Vanguard
Transfer money from your bank—start with whatever you can afford
Type "VOO" in the search bar and click buy
Schedule recurring purchases and let compound interest work
This website is for educational purposes only and does not constitute financial advice. Past performance does not guarantee future results. All investing involves risk, including possible loss of principal. Please consult with a qualified financial advisor before making investment decisions.