Should You Buy the Vanguard S&P 500 ETF With the Stock Market at All-Time Highs? History Offers a Clear Answer

Core Insights - The S&P 500 is currently at a record high, with a year-to-date gain of 17%, significantly outperforming its average annual return of 10.5% since 1957 [1][12] - The rise in the index is largely driven by powerful tech trends, particularly artificial intelligence (AI), which is expected to create substantial value for major companies [2][8] - The Vanguard S&P 500 ETF offers investors a cost-effective way to gain exposure to the index, with an expense ratio of 0.03% [9] Sector Analysis - The information technology sector dominates the S&P 500, accounting for 35.6% of the index, and includes major companies like Nvidia, Microsoft, and Apple, which together have a market value of $12.9 trillion [3][5] - Other significant sectors include financials (13%), consumer discretionary (10.4%), communication services (10.2%), and healthcare (9.1%), indicating a diversified index [5] - The performance of the S&P 500 has been heavily influenced by technology stocks, especially since the AI boom began in early 2023 [6] Future Outlook - AI is projected to generate trillions of dollars in value, with Nvidia's CEO estimating that data center operators will invest up to $4 trillion by 2030 to upgrade infrastructure for AI [8] - Ark Invest anticipates a $13 trillion opportunity from AI developments over the same period, suggesting continued growth potential for tech stocks [8] - Historical trends indicate that the S&P 500 typically trends higher over the long term, despite short-term volatility [12][14]