Two Decades of History Show Why This ETF Is a Safer Bet Than Most Stocks

The S&P 500 has delivered positive total annualized returns over every rolling 20-year period from 1900 to 2025. That’s 107 distinct 20-year windows — from 1900–1919 to 2006–2025 — each ending in a gain, not a loss. For investors deciding how to use a 2026 tax refund averaging $3,462, that record makes the Vanguard S&P 500 ETF (VOO) one of the most data-backed entry points into the stock market.

VOO tracks the S&P 500 with a net expense ratio of just 0.03%, meaning $0.30 of every $1,000 invested goes to fees. Its structure gives instant exposure to 500 of the largest U.S. companies, blending growth and stability. While past performance doesn’t guarantee future results, the consistency of the index’s long-term returns stands in contrast to individual stocks, sectors, or timing strategies that carry higher volatility and failure risk.

The Schwab U.S. Dividend Equity ETF (SCHD) offers a complementary case. It tracks the Dow Jones U.S. Dividend 100 Index and charges 0.06% in annual fees. From 1973 to 2024, dividend-paying stocks returned 9.2% annually, more than double the 4.31% return of non-dividend payers, according to Hartford Funds and Ned Davis Research. SCHD captures this trend with a 3.3% dividend yield and a price-to-earnings ratio lower than both the S&P 500 and Nasdaq Composite, offering value alongside income.

For investors who have already funded an emergency account and eliminated high-interest debt, deploying a tax refund into either VOO or SCHD isn’t speculation. It’s a data-informed decision to participate in long-term financial mechanisms that have, for over a century, turned time and compounding into wealth.