Top 3 Vanguard Stock ETF Picks for 2026

2025-12-12 04:53:00 ET

A glance at the returns for the S&P 500 and Nasdaq-100 in 2025 would create the impression that the markets did pretty well. In reality, the biggest gains were mostly restricted to tech, large-cap, and growth stocks. If you invested in value stocks, dividend stocks, or almost anything defensive, you were probably disappointed by 2025's returns.

As we head into 2026, conditions still look favorable for more gains in stocks. But the composition of the stocks making those gains might start to look different. Most indicators suggest the U.S. economy continues to grow. Overall inflation is relatively contained, even if it's inching up a bit and not getting back to the Fed's 2% target. The unemployment rate is still low compared to historic averages (although some signs point to it rising as well). All in all, it's a somewhat positive economic backdrop.

Investors may be tempted to push further into tech and artificial intelligence (AI) stocks , but there are some questions about valuation and the ability to sustain their red-hot momentum. The market is starting to look for alternatives. If the U.S. stock market continues to broaden, we could be looking at an all-new set of leaders in the new year.

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