Is only investing in the S&P 500 a solid strategy for growth? (bond, dividends)

[mathjak107]

which for the most part mimics the performance of the wilshire total stock market index very closely

[lottamoxie]

One can manage to amass enough to retire just by investing regularly in the S&P 500 every month, for decades. Fast? Nope. But at least $2M from ROI and compounding? Yep.

[ohio_peasant]

I take the thread's thematic question to be: "Should all of my equity investment be in the S&P 500, or should I include midcaps, small-caps, international, and maybe targeted index funds/ETFs such as QQQ?"

This question is distinct from % equity allocation, index-fund vs. actively managed, individual stocks vs. funds, and equity alternatives such as REITs. Those are all... separate questions. Right?

My own emerging belief is that a nearly exclusive embrace of the S&P 500, something like a 90% embrace (the remainder being... whatever) is best... for "most" US-based investors. This excludes international stocks, and small/mid-cap, except in trifling amounts. My investment-life has included copious amounts of small/midcap and international, much to my chagrin and regret.

[mathjak107]

anything one does in diversified equity funds will do just fine over time

[jasperhobbs]

For people 20 -50 years old, a good strategy. After that no way I would recommend that heavy of stock portfolio.

[mathjak107]

i wouldn’t even say that .

there are lots of seniors that are invested for legacy money for heirs . they can be as high as they like .

you may not want to have high levels of equities but there are many retirees who do .

and stress testing 100% equities shows it has had about the same success rate as 50/50 only with much larger balances most of the time

[Grlzrl]

Originally Posted by BigCityDreamer

Most people should think the S&P 500 is the only game in town.

It is practically impossible to beat the market.

Money managers are beating the market with private equity and private credit.

[mysticaltyger]

Originally Posted by littletraveller

Your thoughts?

It wouldn't be my choice, but yes, it's a reasonable option. The main thing is you have to be ruthlessly consistent.

[mysticaltyger]

Originally Posted by StealthRabbit

S&P gain works only while USA works (while business investment is viable).

There has been, and is coming a time when USA business growth does not work.

Better have a plan B (and C).

At the moment.... USA business is working, when tax incentives die (sunset) in 2025, things may no longer work for the S&P. Or America. Lots can change very quickly. Such as China taking over Taiwan. That is a significant risk to the USA business economy. As are politicians here at home. (We have a very dysfunctional political system, in the brink of failure.)

Better have a plan B (and C)

That's all true, but that really points to not being dependent on the money system as a whole, which is a whole other kettle of fish.

[FREE866]

Originally Posted by jasperhobbs

For people 20 -50 years old, a good strategy. After that no way I would recommend that heavy of stock portfolio.

What makes you say that?


A healthy 50 even 60 year old most likely has a 20-30 year investment time horizon. Stocks, historically ,are the best liquid asset class for that time frame, by far.