It isn't hard to double your money in the stock market. All you need is a bit of patience, taking full advantage of dividends and modest price gains over six or seven years.
You can play the market incredibly safely and still double your money in seven years. For example, the venerable S&P 500 index more than doubled over the last six years on a total return basis:
You can't exactly buy shares of the S&P 500 index, but there are many ways to achieve the same effect through mutual funds or exchange-traded funds. For example, it is almost impossible to tell the index line apart from the total returns on the Vanguard S&P 500 ETF, the mutual fund equivalent called the Vanguard 500 Index Admiral Fund, or even the slightly higher-cost SPDR S&P 500 ETF Trust. The difference between the best and worst performers on this list amounts to a rounding error:
So if you don't want to worry about the ups and downs of individual stocks, you can simply park $3,000 in any one of these rock-steady performers. Past results are no guarantee of future performance, but historical trends tend to stay true in the long term. Barring an extreme bear market over the next few years, you should be able to cash out $6,000 from that investment in 2029 or 2030. Temporary slowdowns will come and go, like the COVID-19 panic of 2020 and last year's inflation-driven downturn. Still, the market as a whole continues its relentless march upward as a diverse bundle of businesses creates economic value over time.
It's kind of amazing to see the stock market's biggest winners bubbling up to the top of the S&P 500's market-cap-weighted index over time. You won't miss out on the market gains of Apple, Microsoft, or Amazon by taking the safe route, because they account for 27% of the index's overall value.
So when the next iPhone becomes a must-have item, or Microsoft dominates the artificial intelligence boom, or Amazon's lagging sales growth snaps back to full health, your index fund follows along. At the same time, you're protected from individual companies or entire market sectors running into unexpected headwinds. A massively diverse portfolio strikes a fantastic balance between risk-dodging safety and unstoppable forward motion.
Long-term success based on time-tested wisdom
You don't have to beat the market to double your investment in a few years. Jack Bogle, the founder of Vanguard Group and the "father" of index fund investing, summed it up best: "Don't look for the needle in the haystack. Just buy the haystack!"
That's all you need -- a straightforward approach to steady, long-term gains. Diversification is key, and the S&P 500 index funds provide plenty of that critical quality. These funds are a great example of "buying the haystack."
So pull up a chair, bring your patience and start your journey toward doubling your money in the stock market. Remember, the true magic lies in the simple, time-tested wisdom of buy-and-hold investing and diversification.
