11% Annual Returns May Not Last: Why VTI is the Next Decade's Key Holding

The S&P 500 index has consistently delivered an average annual return of about 11% since 1958. However, this doesn't mean that holding onto the top 10 companies from 1996 will continue to yield similar results in the future.

These 'Magnificent 7' stocks - Coca-Cola, ExxonMobil, Intel, Microsoft, General Electric, Merck, and International Business Machines - have largely remained well-known names over the years. But their market share has significantly changed since 1996.

The current S&P 500 index is dominated by companies like Apple, Amazon, Meta Platforms, Alphabet, Tesla, and Nvidia, which didn't even exist or were not major players back then.

Investors can try to pick stocks that will survive and thrive over the long term. Alternatively, they can opt for an ETF that tracks the economy and provides broad exposure. The Vanguard Total Stock Market ETF (VTI) offers this approach.