Connect the dots. By simply holding a stake in the world's best-known market barometer, you're now only guaranteed to match its usually bullish long-term performance -- an average annual gain of just under 10% per year. But you're also more likely to outperform most other investors, including the professionals.

While all ETFs are different, there are two Vanguard funds I personally own and plan to continue buying for decades. An S&P 500 ETF tracks the S&P 500 ( ^GSPC 1.00%), meaning it includes all the stocks within the index. These stocks come from 500 of the largest companies in the U.S. across all corners of the market.

What's the smartest way to invest $500 right now? Check out a robust Vanguard ETF focused on strong dividends and deep-discount stock valuations.