In the face of uncertainty, making wise investment choices is more crucial than ever. A staggering 80% of Americans express concern about the possibility of a recession, based on a survey conducted by financial organization MDRT in 2025.
While no one can foresee exactly what will happen in the future, market downturns are an unavoidable aspect of economic cycles. Although it’s difficult to predict when the next decline might occur, we can be certain that it will eventually happen. When that moment arrives, there are two exceptional Vanguard ETFs that I plan to invest in heavily.
- Vanguard Total Stock Market ETF
When facing a bear market or economic turmoil, having a well-diversified portfolio is essential. Many stocks may struggle during times of economic instability, but owning a broad range of stocks across various sectors can provide a safety net if some of your investments falter.
The Vanguard Total Stock Market ETF (VTI) offers unparalleled diversification by encompassing the entire stock market. This ETF features an impressive collection of 3,512 stocks, representing companies of varying sizes from diverse industries. Although it tends to lean toward technology stocks—mirroring the overall market composition—it also includes a wide array of established companies from sectors known to withstand economic downturns, thereby helping to mitigate volatility.
Historically, the stock market has always managed to recover from even the most significant downturns, and since the Vanguard Total Stock Market ETF aims to replicate the market’s performance, it is likely to endure any potential recession or bear market that may be on the horizon.
Not only does this ETF stand out as one of the more secure investment options, but it also serves as a robust vehicle for wealth accumulation. Since its launch in 2001, it has achieved total returns close to 500%, even through major market challenges such as the dot-com bubble burst and the Great Recession.
To put this into perspective, if you had invested $10,000 in this ETF back in 2001 without making any additional contributions, your investment would have grown to nearly $60,000 over the past 25 years, despite all the market fluctuations.
- Vanguard Information Technology ETF
The Vanguard Information Technology ETF (VGT) comprises 320 stocks, all within the technology sector. During market downturns, tech stocks typically experience the most significant declines, which might seem counterintuitive. However, this characteristic can actually present a strategic buying opportunity during economic slumps.
Currently, many tech stocks are priced quite high, and market downturns can allow investors to acquire these overvalued stocks at substantial discounts. Investing in a tech-focused ETF like VGT not only diversifies your investments but also increases your chances of including successful stocks that may thrive in the long run.
Historically, tech stocks have proven to be remarkably profitable; since its inception in 2004, the Vanguard Information Technology ETF has surged by nearly 1,500%.
While it's important to remember that previous performance doesn’t guarantee future results—and there are no assurances that the tech sector will continue its upward trend—the rapid advancements in artificial intelligence (AI) could potentially set the stage for continued growth in this industry.
As we look toward the future, the stock market remains unpredictable. However, making informed investment decisions is vital for establishing lasting wealth. What are your thoughts on investing in ETFs during uncertain economic times? Do you believe that tech stocks will maintain their growth trajectory? Share your opinions in the comments!
