The strategy is simple: Buy and hold for 20 years. If you’re young enough to adopt this strategy, it is almost guaranteed to give you a positive return on your investments.
To see how this works, look at ALL 106 rolling 20-year periods from 1900 to 2024: that is, 1900–1919, 1901–1920, 1902–1921, etc., up to 2005–2024). The result? Every single one of those 106 periods generated a positive total return. That’s a 100% success rate.
These weren’t small gains, either:
- About 90% of the rolling 20-year periods produced annualized total returns of at least 6%.
- Half of the periods delivered annualized returns between 9% and 17%.
In other words, in half of these cases, investors doubled their money in less than eight years. If you had invested in any year since 1900 and held for 20 years, you’d have walked away with a solid profit—no matter what economic disasters occurred along the way.
How to Use This Strategy
You don’t need to be a stock-picking expert to benefit. Exchange-traded funds (ETFs) make it easy for anyone to invest in the S&P 500 and let time do the work.
There are many ETFs that track the S&P 500. The most popular options are:
- SPDR S&P 500 ETF Trust (SPY 0.29%)
- Vanguard S&P 500 ETF (VOO 0.29%)
Both ETFs hold all 503 stocks in the S&P 500 (yes, 503—some companies have multiple share classes). The only difference? Their expense ratios:
- SPDR S&P 500 ETF Trust: 0.09%
- Vanguard S&P 500 ETF: 0.03%