S&P 500 Index Fund
S&P 500 Index
The S&P 500 is a stock market index weighted by market capitalization that is made up of 500 of the largest public companies in the United States.
A brief introduction to the S&P 500 index
TODO
- S&P 500 Index: What It’s for and Why It’s Important in Investing https://www.investopedia.com/terms/s/sp500.asp
- Why Do Investors Use the S&P 500 As a Benchmark? https://www.investopedia.com/ask/answers/041315/what-are-pros-and-cons-using-sp-500-benchmark.asp
- How to Start Investing in the S&P 500 Today https://www.investopedia.com/ask/answers/how-can-i-buy-sp-500-fund/
- Investing in the S&P 500 for Retirement: Strategies by Age Group https://www.investopedia.com/investing-in-sp-500-for-retirement-11738986
- How To Choose an S&P 500 ETF https://www.investopedia.com/articles/investing/090414/sp-500-etfs-what-every-investor-should-know.asp
- Why Every Investor Should Consider the S&P 500 for Portfolio Diversification https://www.investopedia.com/sp-500-portfolio-diversification-11739111
- Managing S&P 500 Investment Risks: Strategies You Need to Know https://www.investopedia.com/risks-of-investing-in-sp-500-11738286
- Do Robo-Advisors Beat the S&P 500? https://www.investopedia.com/do-robo-advisors-beat-the-s-and-p-500-7569726
(Source: Quora)
I have $100,000 and I would like to invest in an S&P 500 index fund. Should I invest it all at once, or a little bit each month?
Jonathan Williams, Former Senior Actuarial Analyst at Highmark Blue Cross Blue ShieldUpdated Mar 24
You should contribute the maximum amount of money to your IRA and 401k for the Current Year and of course invest with the S&P 500. Below is a step by step guide.
-Current Year
1st- Put 3 to 5 months salary in a high yield savings account or money market account making 5%. Put all money that is not allocated yet into this account until it is time to use it.
2nd- 22.5k into your 401k this year if you have not already.
3rd put 6.5k into an IRA. That means 6.5k into a Roth or traditional IRA immediately. If you are under 45, it should be a Roth IRA. If you are over 45 go with a traditional IRA.
3rd- Immediately put around 30k into standard index funds.
-Next Year
4th- 7k immediately into the Roth IRA on January 1st.
5th- put 23k into a 401k over the course of the next year to make sure you are getting company match. You will probably want to put 23k/26 into your 401k every 2 weeks.
6th- put the remaining money that is not emergency money into the standard index fund.
Never forget to use tax advantaged accounts! You should get back around 10k or more in taxes doing what I just recommended on top of any returns you make.
Would investing 100% of my portfolio in the S&P 500 be smart or dumb?
Errold, Real Estate/Securities/Insurance/Financial Prof (1974–present)4y
Guess what Buffett is doing for his wife after he dies? Except for a small percentage that goes into Treasuries for living expenses, the rest is to go into the S&P 500 and STAYS THERE.
Do I think that is valid? Yes and No.
The yes part is I might like a slight change for allocations for index funds in the international arena and into the NASDAQ as well. But overall I don’t have a problem with this. That said, the S&P 500- actually any fixed investment- has a 95%+ probability in ‘working’ as expected for a current 5 years, and a 85% to 95% for the next 5 years. But once you go beyond 10 years, its a crapshoot as to what is valid. You look at all the international screwups, wars, tariffs etc., I just do not feel that you can just leave something ‘forever’.
The NO part is this: The inverted yield curve has indicated a U.S. recession in the forthcoming year. It is not a guarantee but it has been 100% correct for the last 50 years. It does not state when it will occur, how long it will last nor how bad it will be. Losses in 2000 were 49% and in 2008 were 57%.
If you were to put all your funds into the S&P500 and a recession occurred in 2020, you are very apt to lose 50%. Make sense? Hopefully not. The industry likes that you stay invested no matter what- buy and hold, buy on the dip or, my “favorite”, the market always comes back. Consider that there were no stats ANYPLACE that thought this could happen
The Japanese stock market is still down about 80% after 21 years of recession. Obviously I am not stating that the U.S. mirror what happened to Japan but when you consider the economic mess of the world, a trial for impeachment, etc., etc. there are situations that do not conform to some “history”.
I might concede that the market always comes back- but you could be dead by then.
I do not feel that you should invest now due to the 100% indicator etc. so wait a couple months to let the dust settle.
If you were to invest now- or for those already invested, the idea of buy and hold has hurt millions due to the 49% and 57% loss. Over many years I developed a 4 stage Process that keeps recessionary losses to about 12% to 15%. These are articles on how it works, etc. But they were not written for consumers so they are hard reads. If you reread enough times you can see how it works
- Revolutionary Method for Asset Allocation- Increase Returns, Reduce Risk: https://www.linkedin.com/pulse/revolutionary-method-asset-allocation-increase-risk-errold-moody/
- Rebuttal to NY Times Retirement article. Terrible Advice & High Risk: https://www.linkedin.com/pulse/rebuttal-ny-times-retirement-article-terrible-advice-errold-moody/
- EF Moody’s Mutual Fund Value at Risk/Stress Test: https://www.linkedin.com/pulse/ef-moodys-mutual-fund-value-risk-errold-moody-phd-msfp-llb-mba-bsce
- EF Moody’s Daily Commentary: http://efmoody.com/gripes.html
- EF Moody’s first major upgrade to Risk in the last 30 years+: https://www.linkedin.com/pulse/first-major-upgrade-risk-decades-errold-moody-phd-msfp-llb-mba-bsce/
This works for a bear market (not as bad as a recession) since the focus is solely geared to RISK of Loss.