MFOHome About Commentary Discussions Funds The Best Resources Support Us!

Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

Sign In Register

Categories

In this Discussion

Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

    Support MFO

  • Donate through PayPal

Why buy the S&P 500?

WABACWABAC
edited October 26 in Fund Discussions
I was looking at our taxable accounts, and noticing the returns on our various tech-sector funds, and so I asked myself, why even buy the S&P 500 these days--not that I am actually in the market for adding much of anything to the taxable at this point.

If I was 20-30 years younger, why not just buy a tech fund--or four in the case of my taxable (because I like baskets)--and rearrange the rest of the deck chairs to suit my druthers, i.e., risk tolerance?



Comments

  • CrashCrash
    edited October 26
    The Market's been rising and rising. Until it doesn't, but that should not surprise anyone when it happens. The cycle happens over and over. I recall that the lion's share of the profits and moneymaking in the SP500 is severely concentrated at the top, in the MAG7. Right? My mutual funds own the big, shiny, famous names.

    That's why with my (slowly growing) taxable account, where I play with lots less money and choose single stocks, I search and dig to find unknown names that are actually great companies, carrying much lower P/E ratios. Because I like dividends, I am often in banks--- banks that are off everyone's radar. Just lately I took a tiny toe-hold into a Singapore-specific ETF with the ticker, EWS. (iShares, BlackRock.) Selecting that ex-USA new holding was strategic. The rest of the world has seen the erratic political and economic behavior out of Washington, and they are looking to build compacts with each other and bypassing the U.S. ...Canada is/was our 2nd-biggest trading partner, but it sure looks as if that's not going to hold for long.
  • WABACWABAC
    I never got the itch to buy individual stocks.
  • CrashCrash
    edited October 27
    :)

    Call yourself fortunate, eh?
    https://www.barrons.com/market-data/funds/gal?mod=searchresults_companyquotes&mod=searchbar&search_keywords=gal&search_statement_type=suggested

    It's a fund of funds. Maybe that won't appeal to you.
  • WABACWABAC
    Only fortunate because I know it would drive me crazy obsessing over every detail all the time. So I'm not as crazy as I could be.:-D

    I bought SMH for the taxable in February 2024 when some poster here was talking about chips. So I put a few bucks down. And zowie! I already had TDIV, FSCSX, and CSGZX.

    So it keeps me comfortable owning my old fogies like DODGX, SEQUX, VEIRX, FSMEX, and POSKX; plus the fliers on FMIMX, GLFOX, RWJ, VSMIX, etc.

    There are some duds mixed in there too. I'll be rearranging those deck chairs overboard in the near future.

    If you already have tech, why buy the rest of the S&P 500 willy nilly when you could focus on SPHQ or SPGP?
  • mskursh
    edited October 27
    I have an advisor friend who started in the mid 90's. He said after the dot com bubble people were sheepish on tech sector for a good while, and before they really got a taste for it again, the great recession happened. For example the Q's maintained a very meager AUM 10 years after the dot come bubble. it took quite a while to recoup (2014ish) and it took a while for people to begin to invest in tech again. which when you look at the chart today you go well if they'd of just held on! but tech killed their portfolios in the dot com bubble. then banking system as we knew it failed 6-7 years later which once again gave everyone pause.

    I know a guy i went to college with who says he held onto the rydex nasdaq100 and fidelity select tech through out (imo its tall tales out of school) and maybe he did but thats a makeup most people don't/didn't have. LOTS of people in their late 20's and 30's with tech portfolios who have had it work for them quite a bit.

    so the answer is ultimately risk. I sometimes ask this question to the young coworkers who ask a similar question. why not just tech, why not 3Xtech?

    I do believe technology itself will likely lessen the time it takes from peak to peak in a recession. I have no evidence of this outside of the v shape recoveries we've experienced in the past handful of years. I feel like these would of drawn out longer 20-30 years ago.
  • FD1000
    edited October 27
    My SIL has been buying 50/50 VOO/QQQ for years now. He can already retire.

    In the early 1990s, a good friend invested in ten individual stocks, putting about $3,000 into each. The rest of his monthly contributions went into the S&P 500.
    Nine of those stocks didn’t amount to much — but the tenth, Microsoft, grew into more than $1.5 million.
Sign In or Register to comment.