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Almost All My Money Is in One Simple Investment. Here’s Why

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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.

The S&P 500 has a consistent track record

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.

 

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Tesla shares soar more than 14% as Trump win is seen boosting Elon Musk’s electric vehicle company

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NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.

Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.

“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”

Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.

Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.

Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.

Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.

In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.

The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.

And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.

Tesla began selling the software, which is called “Full Self-Driving,” nine years ago. But there are doubts about its reliability.

The stock is now showing a 16.1% gain for the year after rising the past two days.

The Canadian Press. All rights reserved.

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S&P/TSX composite up more than 100 points, U.S. stock markets mixed

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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.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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S&P/TSX up more than 200 points, U.S. markets also higher

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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.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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