Want $1 Million in Retirement? 4 Simple Index Funds to Buy and Hold for Decades
Key Takeaways
You'll want to own all four, since they move at least somewhat independently of one another, making them all easier to stick with over time.
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7 min read
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investment
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July 18, 2025
10:07 AM
The Motley Fool
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The analysis demonstrates What caught my attention is You'll want to own all four, since they move at least somewhat independently of one another, making them all easier to stick with over time
Moreover, Picking stocks can be a lot of fun
But it can also be constant work, in this volatile climate
The more active a portfolio is, the higher the odds of it underperforming
Something simpler and far more passive buying and holding exchange-traded funds (ETFs) for the long haul is far more ly to build real wealth, in light of current trends
To this end, if you're ready to make such a strategic shift, here's a rundown of four complementary index ETFs that could make you a millionaire
On the other hand, However, You just need to be willing and able to leave them alone long enough to let them
Start with the basics It should come as no surprise that this list starts with ETFs meant to mirror the S&P 500
Additionally, It's the quintessential buy-and-hold equity investment
Nevertheless, After all, this index reflects 80% of the U, given current economic conditions
Stock market's collective market capitalization and boasts a long-term average annual gain of 10%
Additionally, The SPDR S&P 500 ETF Trust (SPY -0. 10%) or the Vanguard S&P 500 ETF (VOO -0
Additionally, 04%) are your easiest and most liquid choices here
Vanguard's version of the index fund is nically cheaper to own with an annual expense ratio of only 0, in light of current trends
But both are a cost-effective enough way of plugging into the index's long-term upside, in today's financial world
However, You can afford to be a little speculative Exchange-traded funds don't exactly lend themselves to speculation -- at least not in the same way that investors speculate on individual stocks (something worth watching)
Nevertheless, But that doesn't mean you can't successfully use strategic exposure to certain kinds of ETFs
You could deliberately hold an oversized stake in the nology sector via the nology Select Sector SPDR Fund (XLK -0
However, Additionally, 07%) or a similar fund (this bears monitoring)
After all, just as they have for the past three decades, nology companies are ly to introduce the most game-changing and lucrative innovations for the next 30 years
But wouldn't the Invesco QQQ Trust (NASDAQ: QQQ) do the job just as well, if not better
Maybe, but not necessarily
While it is true that the underlying Nasdaq-100 includes many of the market's best-performing nology tickers of the past several years ( Nvidia, Microsoft, and Apple), this may not always be the case
Additionally, Remember, the Nasdaq-100 isn't inherently meant to be a nology index -- it just so happens that most of the market's top names right now are Nasdaq listings
As time marches on and new companies grow bigger than the market's biggest players right now, these new titans might not be nology outfits, or even Nasdaq-listed names
Nevertheless, They could be listed on the New York Stock Exchange instead
Since the nology Select Sector SPDR Fund is specifically built to reflect the performance of the S&P 500's nology stocks, though, you'll be plugged into the sector no matter where these tickers are listed, in today's market environment
On the other hand, While the Invesco QQQ Trust has duced some amazing gains since its launch back in 1999, it has also missed out on many nology companies' growth that got them there in the first place
By including the smaller names found within the S&P 500, you'll be invested at key periods of their growth
You need international stocks more than you have in a long, long time Do you really need to own foreign stocks
Moreover, It's a prudent question to begin asking again (noteworthy indeed)
International stocks were considered a must-have well before and a little after the turn of the century
Since then, though, so many U
On the other hand, Companies have performed so consistently well and become so international on their own, there's been no meaningful benefit in specifically adding foreign exposure to your portfolio
But now that pendulum seems to be swinging back in the other direction
Additionally, With most nations starting to back off on their -international trade policies and refocusing more on domestic trade, we're seeing foreign nations and regions' economies -- and stock -- start to perform independently of U (quite telling)
And in many cases, they're performing better than their U
In contrast, Counterparts
Furthermore, Furthermore, The Organization for Economic Co-operation and Development, for instance, believes worldwide GDP growth averages will roll in at 2. 9% this year and next
However, The analysis reveals United States' GDP is expected to grow by only 1, amid market uncertainty. 6% this year, however, before slowing to a growth pace of 1
Moreover, 5% next year, in today's financial world
In this vein, foreign stocks have easily outperformed U
Stocks so far this year largely because of these disparate outlooks
On the other hand, Image source: Getty Images
Sure, the domestic economy might perk up in the foreseeable future
Or it might not (noteworthy indeed), in light of current trends
That's the point -- nobody knows (fascinating analysis)
Moreover, We only know enough to know a stake in something the is Core MSCI EAFE ETF (IEFA -0 (something worth watching), given the current landscape. 22%) is a smart way of curbing some of the risk of betting on a less-than-certain U, in today's market environment
Better than U (an important development)
Large caps Finally, if you want your best shot at becoming a millionaire using ETFs at the core of your portfolio, add an often-overlooked dimension to your holdings
Additionally, In contrast, That's, make a point of buying more U
Meanwhile, Mid-cap stocks, given the current landscape
Moreover, The Vanguard Mid-Cap ETF (VO 0. 47%) meant to mirror the performance of the CRSP US Mid Cap Index will do the job nicely, in light of current trends
Does it really matter (an important development)
Actually, it does, in this volatile climate
Furthermore, Given enough time, mid-cap stocks significantly outperform their large-cap counterparts
At the same time, The S&P 400 Mid Cap Index, in fact, has nearly doubled the performance of the S&P 500 since the beginning of this century (which is quite significant). ^MID data by YCharts What gives
Nevertheless, Mid-cap names are often in their sweet spot of growth -- past their wobbly start-up years, but not yet in their prime
Sometimes mid-cap companies are recent spinoffs from large-cap outfits that recognize the entity in question would be more valuable as a stand-alone company
Whatever the case, these names ly pay off in the long run
On the other hand, The only downside to consider here is that while these names collectively duce stronger gains, they also dish out for more volatility than large-cap stocks (noteworthy indeed)
You'll need to mentally plan on holding this mid-cap ETF for decades just to make these big swings bearable in the meantime
James Brumley has no position in any of the stocks mentioned
Nevertheless, The Motley Fool has positions in and recommends Apple, Microsoft, Nvidia, Vanguard Index Funds-Vanguard Mid-Cap ETF, and Vanguard S&P 500 ETF
What the re reveals is Motley Fool recommends the ing options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft (this bears monitoring)
The Motley Fool has a disclosure policy, in today's market environment.
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