Many new investors freeze at the question, “So… what should I actually buy?” Charts, ticker symbols and hot stock tips can make investing feel like a puzzle only professionals can solve.

In reality, most people don’t need complex strategies or a watchlist the length of a novel.

For long-term goals, one simple approach often does the heavy lifting: owning the market through a broad index fund. That’s where the “VOO and chill” idea comes in — using a single exchange-traded fund that tracks the S&P 500 and then largely getting out of the way.

Why VOO Works

VOO is an ETF designed to mirror the S&P 500, an index representing roughly the 500 largest publicly traded companies in the United States. By owning one fund, an investor effectively holds a slice of many industries at once: technology, healthcare, consumer goods, finance and more.

Because it is passively managed, VOO charges extremely low annual fees. The expense ratio sits close to zero compared with many actively managed funds that charge well over ten times as much. Over decades, that fee difference compounds into a meaningful gap in wealth, even when performance looks similar year to year.

For everyday investors, consistently beating the S&P 500 is extraordinarily rare. The majority of actively managed stock funds trail the index over long periods, especially after costs. That’s why many planners view a broad index ETF as a sensible “default setting” for building wealth.

Active funds have struggled mightily to beat their index fund counterparts — just 33% of active funds outperformed their passive peers over the 12‑month period ending June 30, 2025, and long‑term data show active managers rarely beat broad market benchmarks like the S&P 500 — Morningstar analysis reported by CNBC.

Set It, Forget It

The “VOO and chill” mindset resonates most for people who already cover the basics: an emergency fund, regular retirement contributions and manageable debt. Once those foundations are in place, directing extra money into a simple index ETF can be an efficient way to let time and compounding do the heavy lifting.

Rather than chasing the latest tip or trying to time every twist in the market, this strategy accepts that markets will be bumpy and leans on a long horizon. The job becomes straightforward: automate contributions, avoid panic-selling during downturns, and give the investment years — not weeks — to work. Simplicity is more than convenient; it’s protective.

Fewer moving parts means fewer chances to second-guess decisions, overtrade or get pulled into speculative frenzies that don’t match long-term goals.

Hidden Concentration

However, “simple” does not mean “risk-free.” The S&P 500 is diversified across many businesses, but it is weighted by company size. In recent years, a small group of enormous technology-related firms has grown to represent a striking portion of the index’s total value.

That means an investor using only VOO has more exposure to a handful of dominant companies than the fund name might suggest. When those giants rise, the index soars. If they stumble or an enthusiasm cycle around new technologies cools, the same concentration can drag the whole index down.

Some analysts worry that the enthusiasm around artificial intelligence could inflate expectations for certain major names. If that optimism deflates, even a broad index fund can experience sharp declines. Historically, the S&P 500 has seen drops of 30% or more in severe sell-offs, and VOO has followed closely. The real test of “VOO and chill” is whether an investor can truly stay calm in those moments.

Can You Really Chill?

Holding the right investment is only half the equation. The other half is behavior. A broad index ETF only delivers its potential when the owner stays invested through rough patches instead of bailing out at the worst possible time.

Seeing a portfolio fall significantly in value can be unsettling, even when the logic of long-term investing is clear. That emotional stress is often what causes people to abandon sound strategies. For the “chill” part of the plan to work, the portfolio must be built in a way that matches the investor’s true tolerance for swings, not just the tolerance they wish they had.

Sometimes that means dialing back risk slightly or adding complementary holdings so that inevitable downturns feel more manageable.

Adding Diversification

One way to soften the reliance on large U.S. companies is to pair VOO with funds that focus on other parts of the global market. A total international stock ETF, for example, spreads investments across developed and emerging markets outside the United States.

Adding international exposure can reduce the impact of U.S.-specific trends and broaden the opportunity set. Over different periods, foreign markets and smaller domestic companies have taken turns leading and lagging. Owning both allows investors to benefit from whichever area is in favor without needing to predict in advance.

Small-cap or diversified sector ETFs can also complement a VOO-heavy portfolio, giving some room to businesses that are overshadowed by mega-sized names in the main index. The goal is not complexity for its own path, but a modest expansion that trims concentration risk.

Safety Balancers

Cash-like assets and high-quality bonds can play a quiet but important role alongside equity funds. Short-term Treasury bills, accessed directly or through ETFs, tend to be far less volatile than stocks and can provide a buffer when markets slide.

Including a portion of these steadier holdings can reduce the size of portfolio swings. That, in turn, makes it psychologically easier to stick with the plan when headlines turn gloomy. For some investors, a blend of something like VOO plus an international fund and a Treasury-focused ETF offers enough balance to stay committed.

Conclusion

For many people, a low-cost S&P 500 ETF such as VOO remains a powerful core holding: broad, inexpensive and historically hard to beat. The challenge is not only choosing it but staying patient through booms, setbacks and headline noise.

Thoughtful add-ons — global stocks, smaller companies, or short-term Treasuries — can make that patience easier to sustain. In the end, the question is simple: could a straightforward, mostly automated portfolio help you worry less and stay invested when markets are anything but calm?