Investment
Here’s how much money you’d have if you invested $1,000 in the S&P 500 a decade ago
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During the Berkshire Hathaway annual meeting in 2020, billionaire and legendary investor Warren Buffett told the audience, “in my view, for most people, the best thing to do is own the S&P 500 index fund.”
It’s a sentiment Buffett has stood by and repeated because he believes it’s a way for investors to help mitigate the risks that come with choosing individual stocks.
“The trick is not to pick the right company. The trick is to essentially buy all the big companies through the S&P 500 and to do it consistently and to do it in a very, very low-cost way,” he told CNBC in 2017.
The S&P 500 is a market index that tracks the stock performance of around 500 large-company U.S. stocks, including Amazon, Google parent company Alphabet, Meta and Visa.
While the index is not immune to overall market downturns, long-term investors have historically earned a nearly 10% average annual return. However, as with all investments, it’s important to note that past performance can’t be used to predict future results.
Here’s how much you’d have now if you’d invested $1,000 in the S&P 500 about one, five and 10 years ago:
If you had invested $1,000 into the S&P 500 about a year ago, your investment would be worth about $942 as of April 20, according to CNBC’s calculations.
Had you invested $1,000 into the S&P 500 about five years ago, your investment would have grown to about $1,689 as of April 20, according to CNBC’s calculations.
And if you had put $1,000 into the S&P 500 about a decade ago, the amount would have more than tripled to $3,217 as of April 20, according to CNBC’s calculations.
Why index funds can be a smart investment
While you can’t directly invest in the index itself, choosing to buy an S&P 500 index mutual fund or exchange-traded fund (ETF) gives you exposure to the index’s underlying stocks.
Financial experts generally consider these types of funds less risky than owning individual shares. By spreading your bets across some 500 companies, you lower the chances that a drawdown in any one particular stock would hurt your portfolio’s performance.
Additionally, because index funds are considered passive strategies, they tend to be low-cost investments. Index funds merely track a benchmark’s performance and therefore don’t employ a manager to run the fund, as is the case with “active” strategies.
As a result, the average passive fund charges an annual fee of 0.12%, compared with a 0.60% average fee among active funds, according to the latest data from Morningstar.
How compounding can help you build wealth
When it comes to investing, the sooner you start, the better. That’s because of compound interest, which can help your money grow.
Here’s how it works: After you make an initial investment, you theoretically earn a return on that principal amount. As interest is added to your balance, you begin to earn interest on that amount as well.
Say you invest $1,000 and earn an annualized return of 4%. A year later, your investment would have grown to $1,040 which is your original $1,000 investment plus four percent.
In year two, you’d earn 4% on the entire total, not just the principal balance of $1,000. By the end of the year, you’d have $1,081.60. In year three, you’d then earn 4% on $1,081.60, and so on.
You can use CNBC Make It’s compound interest calculator to see how it can help your money grow based on your initial deposit, your monthly or annual contributions, interest rate and time horizon.
Investment
Governments are continuing to push investment into clean energy amid the global energy crisis – News – IEA
The amount of money allocated by governments to support clean energy investment since 2020 has risen to USD 1.34 trillion, according to the latest update of the IEA’s Government Energy Spending Tracker. Around USD 130 billion of new spending was announced in the last six months – among the slowest periods for new allocations since the start of the Covid-19 pandemic.
This slowdown may be short-lived, however, as a number of additional policy packages are being considered in Australia, Brazil, Canada, the European Union and Japan. Already, government spending is playing a central role in the rapid growth of clean energy investment and expanding clean technology supply chains, and is set to drive both to set to drive both to new heights in the years ahead. Notably, direct incentives for manufacturers aimed at bolstering domestic manufacturing of clean energy technologies now total around USD 90 billion.
At the same time, governments continue to increase spending on managing the immediate energy price shocks for consumers. Since the start of the global energy crisis in early 2022, governments have allocated USD 900 billion to short-term consumer affordability measures in addition to pre-existing support programmes and subsidies. Around 30% of this affordability spending has been announced in the past six months.
These measures have had a major role in moderating price increases for end users, but the energy crisis nonetheless took a toll on many people’s budgets. According to the IEA’s latest data on end-user prices across 12 countries, which together represent nearly 60% of the global population, the average household spent a higher share of its income on energy in 2022 as energy prices outpaced nominal wage growth. On average, households in major economies spend between 3% and 7% of their incomes to heat and cool their homes, to power appliances and to cook – though shares are higher for low-income households. In most major economies, the share of income spent on energy moved up by less than 1% thanks to government interventions.
At the pump, consumers felt the impact more acutely, especially in emerging markets and developing economies, where transport fuels accounted for the joint largest increase in household spending in 2022 alongside food. Without government intervention, this would have been much higher. This was the case in Indonesia, where the average household total energy expenditure would have tripled in 2022 were it not for affordability support.
Early numbers for 2023 show that wholesale energy prices are easing. However, retail prices are unlikely to fall as quickly. High prices are already making clean energy technologies more cost competitive, notably electric vehicles and heat pumps, which saw record sales in 2022. As high prices persist, the uptake of clean energy technologies is set to accelerate further, hastening the emergence of the new energy economy.
The UK attracted the highest amount of inward direct investment in 2022, extending its lion’s share of the European market to more than a quarter.
Releasing figures sure to infuriate pro-EU activists, the annual Ernst & Young (EY) attractiveness survey found foreign investors flocked to the City to fund 46 financial services projects last year, up from 39 in 2021.
By comparison, second place Paris enticed foreign investment for 35 finance proposals, sliding from 38 in 2021, while Madrid secured 22 foreign investment projects compared to 29 in 2021.
Anna Anthony, UK financial services managing partner at EY, said: “Investors recognise the strength, gold-standard governance and resilience of the UK’s financial system and see it as the preferred destination for growth, innovation and access to top talent.”
The Square Mile continues to be a beacon of prosperity
PA
Overall, the UK attracted foreign investment to 76 financial services projects in 2022, a 17 per cent rise on the 63 projects in 2021.
It puts clear blue water between the UK and France, which recorded 45 projects in total, down 15 on 2021 figures.
Andrew Griffith, economic secretary to the Treasury, told City AM: “We have a tremendous track record of attracting the brightest and best companies in the world built on the long standing competitive advantages of the UK and its attractiveness as a place to do business.”
The UK has topped EY consultancy’s finance foreign direct investment table every year since the research started, including every year since the 2016 Brexit vote.
Andrew Griffith pictured second to the right
PA
Likewise, London has led the European city table since it was first recorded in 1986.
America was the biggest source of foreign investment in financial services in Europe last year, accounting for 21 of the UK’s 76 projects in 2022.
Financial services investment projects created 2,603 jobs in the UK last year, a rise of four per cent on 2021.
Across Europe, 10,700 new jobs were created in financial services, of which 1,700 were recorded in France.
EY’s home in Canary Wharf at 25 Churchill Place
Cushman and Wakefield
Chris Hayward, policy chairman at the City of London Corporation, said: “London continues to lead Europe in attracting foreign direct investment in financial services, and the sector is proving resilient despite the global challenges facing the UK economy.”
Hayward added: “That is good news for every household, because a strong City creates the wealth and jobs that support the economy and fund our public services.”
EY has undergone a UK leadership shake up recently following a collapse in the consultancy firm’s plan to break up its audit and consulting operations globally.
The break up blueprint, coined ‘Project Everest’, attracted fierce internal criticism and was eventually abandoned but not before it had cost the firm £480million worth of internal work.
On the back of ditching the radical overhaul, EY has shrunk the UK executive committee from 13 to eight and announced that it will cut 3,000 jobs in the US.
The big four consultancy firm reported record levels of growth for its UK business in November 2022, with UK revenues up 17.2 per cent and UK fee income increasing to £3.23billion from £2.75billion.
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The local property market stands to reap significant benefits, both short-term and long-term, from a likely credit rating upgrade to investment level for Greece.
Industry executives say that would be a very positive development, as, after 14 years, the Greek real estate market will return to the “elite” of investment destinations and it will become easier to attract foreign investment groups and funds.
“There is an objective problem right now regarding the implementation of investments by a number of institutional investors, as there are rules that prohibit the placement of funds in countries below investment grade. In other words, even if there was an investment opportunity and they were willing to take the risk, such an investment would be cut off by the investment committee of the respective group, because it is not allowed to invest in countries that do not have a positive credit rating,” Tassos Kotzanastassis, ULI global management committee executive and CEO of international real estate investment management company 8G Group, tells Kathimerini.
Securing investment grade means the Greek property market will get back on the “radar” of large institutional investors and state groups that have a long-term investment horizon. This is a development that contradicts speculative moves by a portion of institutions that have been placed in Greece, with a purely short-term horizon, aiming to secure a quick profit and exit from the country.
However, as Kotzanastassis warns, new investments from large foreign funds should not be expected, at least not immediately. “In this period, at the international level, there is significant uncertainty and investors appear restrained. Many are looking for investment opportunities in the form of distressed assets,” he emphasizes.
One of the market’s perennial problems is it is shallow, so it is difficult to create economies of scale that maximize the return on an investment. Another key point is that all foreign investors of this scope are looking for properties with green characteristics, in the context of the ESG policy they follow. Such properties are still rare in this market, constituting a very small minority in relation to the total stock.
Wall Street’s Blackstone Made Billions in Real Estate Bet on Urban Warehouses – Bloomberg
Brent may rise toward $100/bbl as Saudi output cut could worsen supply gap – analysts – Yahoo Finance
Inside the fundamentalist Christian movement that wants to remake Canadian politics – CBC.ca
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