‘VOO and Chill’: Why This Popular Investment Strategy May Be Losing Its Appeal — Even With Stocks at All‑Time Highs

For more than a decade, the phrase “VOO and chill” has been shorthand for a simple, almost effortless investment strategy: buy shares of Vanguard’s S&P 500 ETF (ticker: VOO), hold them, and let the market do the work. The approach became a cultural meme in the 2010s and 2020s, embraced by retail investors, financial influencers, and even professional advisors as the ultimate low‑cost, low‑maintenance way to build wealth.

But as of late 2025, cracks are beginning to show in the once‑bulletproof appeal of this strategy. Despite U.S. stocks sitting at record highs (the S&P 500 has surged more than 18 percent year‑to‑date) investors and strategists are increasingly questioning whether “VOO and chill” is still the best path forward.

The shift is not about the ETF itself, which remains one of the largest and cheapest index funds in the world, with more than $1 trillion in assets under management. Instead, it reflects broader concerns about concentration risk, global diversification, and the evolving psychology of investors who have lived through both the longest bull market in history and a series of sharp corrections.

The Rise and Reign of ‘VOO and Chill’

The Vanguard S&P 500 ETF was launched in 2010 as a low‑cost way to track the performance of America’s 500 largest publicly traded companies. With an expense ratio of just 0.03 percent, it quickly became a favorite among cost‑conscious investors. By the mid‑2010s, as passive investing surged, VOO was often mentioned in the same breath as SPY, the SPDR S&P 500 ETF, and IVV, the iShares Core S&P 500 ETF.

The phrase “VOO and chill” emerged during the pandemic era, when retail investing exploded thanks to commission‑free trading apps and stimulus checks. The idea was simple: instead of chasing meme stocks, crypto tokens, or speculative options trades, investors could simply buy VOO, sit back, and relax. The ETF’s steady performance, combined with the cultural cachet of “chill,” made it a meme in its own right.

Between 2020 and 2024, VOO delivered annualized returns of more than 12 percent, outpacing most actively managed funds. Its simplicity was its strength: no need to pick winners, no need to time the market, no need to worry about fees. For younger investors especially, it became the default strategy.

But as the market landscape has shifted in 2025, so too has the narrative.

Why the Strategy Is Losing Its Shine

Despite record highs in the S&P 500, several factors are eroding the appeal of “VOO and chill.” The first is concentration risk. The S&P 500 has become increasingly dominated by a handful of mega‑cap technology companies. As of October 2025, the top 10 stocks, including Apple, Microsoft, Nvidia, Amazon, and Alphabet, account for more than a third of the index’s total weight. This concentration means that VOO’s performance is heavily tied to the fortunes of a small group of companies. While these firms have delivered stellar returns in recent years, investors are wary of overexposure. The AI boom, which fueled Nvidia’s meteoric rise, has also raised concerns about bubbles and overvaluation. If one or two of these giants stumble, the entire index could suffer.

Another critique is that “VOO and chill” is inherently U.S.‑centric. While the S&P 500 includes multinational companies with global revenue streams, it does not provide direct exposure to international markets. In 2025, as emerging markets like India and Brazil post stronger growth rates than the U.S., and as Europe stabilizes after years of sluggish performance, investors are increasingly looking abroad. ETF strategists note that flows into international equity funds have picked up significantly this year, while inflows into broad U.S. index funds like VOO have slowed. “I think investors are looking beyond just the ‘VOO and chill’ approach where you just buy the index in an ETF, which is a great approach but they’re looking for diversification,” said Gavin Filmore, Chief Revenue Officer at Tidal Financial Group, in a CNBC interview this week.

The psychology of investors has also changed. After living through the pandemic crash of 2020, the inflation shock of 2022, and the AI‑driven rally of 2023 through 2025, investors are more attuned to volatility and risk. Many no longer find comfort in a “set it and forget it” approach. Instead, they are seeking strategies that allow for tactical adjustments, whether through sector ETFs, bonds, or alternative assets like gold and Bitcoin. This shift is reflected in ETF flows. According to ETF Daily Pulse, VOO still attracted more than $80 billion in inflows in 2025, but that was down from its peak years. Meanwhile, gold ETFs, Bitcoin ETFs, and international equity funds have seen record inflows.

For older investors nearing retirement, “VOO and chill” may no longer provide the stability or income they need. The S&P 500’s dividend yield remains below 2 percent, and its volatility can be unsettling for those who need predictable cash flow. Advisors are increasingly steering retirees toward dividend ETFs, bond funds, or balanced portfolios.

What Comes Next for Passive Investing

The decline in enthusiasm for “VOO and chill” does not mean the end of passive investing. Index funds remain the backbone of many portfolios, and VOO continues to be a cornerstone holding for millions of investors. But the conversation is shifting from “VOO alone” to “VOO plus.”

Advisors are recommending that investors pair VOO with complementary exposures. International ETFs can capture growth outside the U.S. Small‑cap ETFs can balance the mega‑cap dominance of the S&P 500. Bond ETFs can provide stability and income. Thematic ETFs in areas like clean energy, AI, or healthcare can offer targeted growth. This evolution reflects a broader truth: no single fund, no matter how efficient, can meet every investor’s needs in every market environment.

At the same time, the rise of alternatives from private credit to tokenized real estate is expanding the menu of options available to investors. While these remain niche compared to VOO, they highlight the growing appetite for diversification.

“VOO and chill” was never meant to be a permanent philosophy. It was a cultural shorthand for a moment in time when simplicity, low costs, and broad U.S. equity exposure felt like the smartest move. For many investors, it worked brilliantly. But as markets evolve, so too must strategies. The S&P 500 remains a powerful engine of wealth creation, and VOO will likely continue to be one of the most popular ETFs in the world. Yet the days of blind faith in “VOO and chill” may be fading. Investors are asking harder questions about concentration, diversification, and risk.

In the end, the lesson may be less about abandoning VOO and more about recognizing its limits. As one strategist put it: “VOO is a great foundation. But no one builds a house with just a foundation.”

Original reporting by Nick Ravenshade for NENC Media Group
Sources: CNBC, U.S. News, Forbes, ETF Daily Pulse.