Is the Vanguard S&P 500 ETF a Buy Right Now?

Investing successful the S&P 500 has been thing abbreviated of lucrative implicit the past 3 years. Since the opening of 2023, the scale has seen a full instrumentality of 90% (as of Jan. 29, 2026). Fueled by the "Magnificent Seven" tech stocks and boosted by the emergence of artificial quality (AI), U.S. large-cap stocks person been among the best-performing areas successful the planetary equity markets.

But the system is evolving. The labour marketplace is slowing, and ostentation remains stubbornly elevated. Perhaps much importantly successful the eyes of investors, valuations are being stretched. The Vanguard S&P 500 ETF (NYSEMKT: VOO) trades astatine a price-to-earnings ratio (P/E) of 28. That's among the astir costly levels it has reached implicit the past 100 years.

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That complicates evaluating whether the S&P 500 is worthy investing successful close now. Let's interruption down immoderate of the large factors to see successful 2026.

While momentum, geopolitics, and capitalist sentiment tin thrust equity returns successful the abbreviated term, semipermanent show inactive relies connected net and gross growth. On that front, the S&P 500 has the cardinal enactment to support pushing higher.

A caller study by fiscal information and bundle institution FactSet says: "For 2025, S&P 500 companies are reporting year-over-year maturation successful net of 12.4% and year-over-year maturation successful revenues of 7.2%. For 2026, analysts are projecting net maturation of 14.7% and gross maturation of 7.3%."

The marketplace is overmuch much susceptible to a correction if there's a important slowdown successful net growth. If forecasts hold, we're conscionable not seeing that close now. Most of the net maturation is inactive being driven by large-cap stocks. That summation astir apt needs to broaden into different sectors to enactment a sustainable rally, but the wide scale fundamentals inactive look beauteous good.

There's a content among galore radical that due to the fact that P/E ratios are higher, they person to travel backmost down. That's astir apt existent eventually, but valuations tin stay elevated for immoderate clip arsenic agelong arsenic determination are bully maturation stories to enactment them.

If ostentation remains nether power and the jobs marketplace tin astatine slightest enactment resilient, investors mightiness not find a bully crushed to marque valuations shrink. If we get those conditions successful 2026 and net turn astir 15%, there's a tenable way toward 15% returns if the S&P 500's P/E holds steady.