The investments you choose will make or break your portfolio, especially during periods of volatility. While the market is still near record highs right now, a downturn will eventually hit. Whether that's in 2026 or years from now, it's wise to start preparing your investments for the inevitable slump.
If you're looking to protect your portfolio as much as possible, a broad-market exchange-traded fund (ETF) like the Vanguard Total Stock Market ETF (VTI +0.89%) is one of the best you can own. Here's why I intend to hold this ETF forever -- especially if the market crashes.
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A foolproof ETF to keep your money safe
All investments come with varying levels of risk and reward, and the Total Stock Market ETF is one of the lower-risk options.
This ETF aims to replicate the performance of the entire stock market, encompassing 3,527 stocks across all market sectors. From industry-leading tech giants to up-and-coming small-cap stocks in niche sectors, this ETF has it all.
Greater diversification can help limit risk, especially during market downturns. If a few stocks -- or even an entire industry -- get hit hard during a bear market or recession, the rest of the stocks can help prop up your portfolio. Tracking the stock market as a whole, this ETF is as diversified as you can get.
NYSEMKT: VTI
Key Data Points
Not only is the Total Stock Market ETF one of the safer options out there, but it can also help you build substantial wealth over time. Since its inception in 2001, this fund has earned total returns of nearly 486%. If you'd invested $10,000 back then, you'd have close to $60,000 by today -- with next to no effort on your part.
By investing small amounts consistently, you could earn even more. This ETF has earned an average rate of return of just over 9% per year since its launch. At that rate, if you were to invest $150 per month, you could accumulate more than $388,000 after 35 years.
One drawback to consider
Perhaps the main downside of investing in broad-market funds is that they can only earn average returns. The Total Stock Market ETF is designed to follow the market as a whole, meaning there's no way it can beat the market.
If minimizing risk is your primary goal, the smaller returns may be a worthy trade-off for the relative safety of this investment. But if you're looking to earn above-average returns, you might instead opt for a growth ETF. Those investments carry more risk and are more prone to short-term volatility, but they have a better chance of earning higher returns over time.
The Vanguard Total Stock Market ETF is a safe yet powerful investment with a flawless track record of surviving even severe recessions and bear markets. If you're looking for a workhorse of an ETF to buy and hold for decades, this one is a staple for many investors.
