Tom Lee is a Wall Street analyst with over 25 years of experience. He currently serves as the head of research at Fundstrat Global Advisors, but previously was chief equity strategist at JPMorgan Chase between 2007 and 2014.
Lee manages the Fundstrat Granny Shots ETF(NYSEMKT: GRNY), a thematic fund focused on macroeconomic forces shaping the market. The Granny Shots ETF has outperformed the S&P 500 by nearly 9 percentage points since its inception in late 2024.
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Lee thinks the S&P 500 index will hit 15,000 by 2030, which implies 129% upside from its current level of 6,550. Investors can lean into that possibility by purchasing shares of the Vanguard S&P 500 ETF(NYSEMKT: VOO).
Here are the important details.
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The Vanguard S&P 500 ETF tracks the performance of the S&P 500, which covers more than 80% of U.S. equities and more than 40% of global equities by market value. In other words, the index fund offers exposure to many of the most influential stocks in the world.
The top 10 positions are listed by weight below:
Nvidia: 7.3%
Apple: 6.6%
Alphabet: 5.5%
Microsoft: 4.9%
Amazon: 3.4%
Broadcom: 2.5%
Meta Platforms: 2.4%
Tesla: 1.9%
Berkshire Hathaway: 1.5%
Eli Lilly: 1.4%
The S&P 500 returned 284% over the last decade, which is equivalent to 14.4% annually. Prior to his retirement, Warren Buffett regularly advised individual investors to keep a large portion of their portfolios in an S&P 500 index fund simply because beating the S&P 500 is difficult, even for professional money managers.
“The goal of the non-professional should not be to pick winners,” Buffett wrote in 2014. Instead, he said that individual investors should “own a cross-section of businesses that in aggregate are bound to do well. A low-cost S&P 500 index fund will achieve this goal.”
In fact, only 11% of large-cap funds outperformed the S&P 500 during the last five years, according to S&P Global. That means the vast majority of professional money managers with large-cap funds would have been better off purchasing an S&P 500 index fund than picking individual stocks.
Investors have a few good options when picking an S&P 500 index fund. I prefer the Vanguard fund simply because it has a very low expense ratio of 0.03%, meaning shareholders will pay just $3 per year on every $10,000 invested.
Tom Lee’s prediction about the S&P 500 hitting 15,000 by 2030 is built on two arguments: Businesses will adapt to the global labor shortage by deploying artificial intelligence agents, and millennials will reshape the economy as they inherit wealth from parents and enter peak earnings years.
Automation: Lee believes the global labor shortage, which began in 2015 and will not be resolved until 2047, will reach 80 million workers by 2030. To overcome that obstacle, he believes businesses will adopt AI tools to automate workflows. In turn, technology stocks could eventually represent about 50% of the S&P 500 by weight.
“Between 1948 and 1967, there was a global labor shortage and technology stocks went parabolic. And between 1991 and 1999, there was a global labor shortage and technology stocks went parabolic. So, this is what’s happening today,” according to Lee.
Millennials: The millennial generation is expected to inherit more than $68 trillion over the coming decades in what The New York Times has called “the greatest wealth transfer in history.” Some estimates are even higher, but the key point is millennials will control more disposable income by 2029 than any other generation. That means their preferences for newer technologies will have an outsize impact on the economy.
“Since 2018, we have talked about how millennials, which is the largest generation, are reshaping the economy, mainly through fintech and changes in preference. But of course, now coming is a big generational wealth transfer,” Lee told Bloomberg in 2024.
Here’s the big picture: The S&P 500 is 6% below its record high due to economic uncertainty surrounding rising oil prices and President Donald Trump’s trade policies. Historically, drawdowns have been a buying opportunity, and there is no reason to believe this one is any different. That does not mean the S&P 500 will rebound in the near future, but rather patient investors have reason to believe the benchmark index will be worth much more five to 10 years from now.
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JPMorgan Chase is an advertising partner of Motley Fool Money. Trevor Jennewine has positions in Amazon, Nvidia, Tesla, and Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Berkshire Hathaway, JPMorgan Chase, Meta Platforms, Microsoft, Nvidia, S&P Global, Tesla, and Vanguard S&P 500 ETF and is short shares of Apple. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.
