Buy 2 Vanguard ETFs with $1,000 and hold forever

While the market has been running strong for the past few years, that doesn’t mean you should wait for a pullback before investing. This can be one of the biggest mistakes an investor can make, because when investors try to time the market, they often end up waiting while the market continues to climb.

Instead, the best strategy is to take a dollar-cost averaging approach, where you invest a set amount each month, such as $1,000, based on how the market is performing. This helps eliminate the worry of investing at the wrong time and smoothes your cost base.

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One of the best ways to employ this strategy is through exchange-traded funds (ETFs), which give you an instant portfolio of stocks. Let’s look at two Vanguard ETFs that I start dollar-cost averaging at $1,000 today and hold for the long term.

If I could choose just one ETF to invest in, Vanguard S&P 500 ETF (NYSEMKT: VOO ) would be my top pick. The ETF tracks the S&P 500 index, a market cap weighted index composed of approximately 500 of the largest stocks in the US.

Since the S&P 500 is market-cap weighted, that means the bigger the company by market capitalization (stock price multiplied by the outstanding value of shares), the bigger the stock in the ETF. This allows the fund’s winners to continue to run, which is a big reason why most actively managed funds fail to keep pace with the index. In fact, about 14% of actively managed large-cap funds have outperformed the index over the past decade.

Over the past 10 years, the ETF has generated an average annual return of more than 15.5%, while it has fared even better over the past three years with an average annual return of 21.1%. Those are some good benefits that build over time.

Another one I really like is the Vanguard ETF Vanguard Growth ETF (NYSEMKT: VUG ). Growth stocks have outperformed most over the past 10 years, with the Vanguard Growth ETF outperforming its better-known ETF peers over this period. During that stretch, the fund has produced an 18% annualized return, compared to an average of 27.7% over the past three years.

The fund is heavily weighted toward top artificial intelligence (AI) and other tech stocks, with nearly two-thirds of its portfolio in the tech sector. As AI still seems to be in its early innings and technical valuations overall look quite reasonable, this is a great ETF to invest in for the long haul.