Over the years, I’ve worked hard to transfer money out of my checking account into an investment account to save for the future. As a result, I have a reasonable brokerage account balance.
While I have a good amount of money in my brokerage account, I don’t own a lot of different investments. In fact, almost every dollar is invested in one simple investment: an S&P 500 index fund.
Here’s why I keep so much of my money in one asset instead of spreading it around more.
One of the biggest reasons why I’ve chosen to put my money into the S&P 500 is because this investment has a very long track record, so I know what I can reasonably expect to earn. The S&P 500 has consistently provided around 10% average annual returns since 1928.
Since there’s very little reason to expect that this will change, I feel pretty confident that I can expect my portfolio to give me an average 10% return on investment (ROI) over the long term if I keep my money invested in the S&P 500.
While I could potentially beat this if I picked individual stocks, I’d have to be really good at selecting investments for that to happen. And my returns would be uncertain, which would make it harder to plan how much I need to invest for the future.
If you want an investment with a stable, consistent track record, the S&P 500 may just be a great investment option for you as well.
It provides instant diversification
Because the S&P 500 invests in big businesses in lots of different industries, my investment in it allows me to diversify my portfolio without any real effort on my part. I don’t have to look for dozens of different assets to invest in to make sure I’m exposed to different industries — this one investment is sufficient to give me exposure to different parts of the economy.
If you have a hard time deciding how to divide up your investment dollars across companies in different industries — especially since you’d need to learn about a lot of different types of companies to buy individual stock shares of businesses in different fields — then an S&P 500 index fund might be an easy option for you.
I don’t want to have to think about my investments
Finally, one of the biggest reasons why I’ve chosen to put my money into an S&P 500 fund is that I don’t have to think about it. There’s no need to research beyond using my brokerage account’s screening tool to find a low-fee S&P 500 ETF (exchange-traded fund). I don’t need to worry about whether I should sell due to changing economic conditions. In fact, I don’t even need to check in on my portfolio since my money is just invested automatically in this investment.
If you’re hesitant about opening a brokerage account because you’re afraid investing is complicated or because you don’t know what to invest in, you don’t have to be. You can just pick a simple investment like an S&P 500 fund and put most of your money into it, too. It takes about 10 minutes to get your account open, find a fund, and buy in, so do it now to start your money growing for you.
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.
The S&P/TSX composite index was up 0.05 of a point at 24,224.95.
In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.
The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.
The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.
The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.
This report by The Canadian Press was first published Oct. 10, 2024.
