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US stocks will continue to rise in 2026, but the composition of the rally looks very different.
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Small caps are outperforming, cyclical stocks are outperforming the S&P 500, and technology has begun to lag the index.
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That makes the Vanguard Total Stock Market ETF (VTI) a great option to change up your US stock allocation a bit.
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10 Stocks We Like Better Than the Vanguard Total Stock Market ETF ›
We have already seen a very different market in 2026 than the one we experienced between 2023 and 2025. Technology no longer dominates the discussion. Cyclicals are vastly outperforming S&P 500Small caps are off to a flying start and precious metals are continuing last year’s rally.
Considering the concentration issue alone, I think investors should consider adjusting any large-cap or high-tech allocations. The breadth of the market has improved considerably and investors may want to focus on diversification this year.
However, that doesn’t have to mean major changes to the assignment. An ETF that provides that change is the Vanguard Total Stock Market ETF (NYSEMKT: VTI). As the name suggests, it goes well beyond the S&P 500 and invests in the entire investable US stock market, with over 3,500 stocks. Because it’s market cap weighted, you still get an overweight to large caps, but the overall portfolio ends up including about a 22% allocation to mid- and small-cap companies. This is enough inclination to enhance the benefits of diversification and help capture any rotation towards smaller companies.
And it is thanks to that diversified approach to the US stock market that the fund becomes an ideal buy-and-hold-forever candidate. The 35% allocation to S&P 500 “Magnificent Seven” stocks looks a little more dangerous right now as momentum cools and economic concerns mount. The Vanguard Total Stock Market ETF still maintains that U.S. large-cap bias, but it reduces some concentration risk and adds the potential of long-underappreciated small caps to the mix.
Not only does that make it an ETF I’ll continue to add to in 2026, but I’ll also hold it indefinitely.
Before you buy shares in the Vanguard Total Stock Market ETF, consider this:
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Consider when netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you would have $450,525!* Or when NVIDIA made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you would have $1,133,107!*