If investing in the S&P 500 is such a surefire way to make money, then why isn't everyone doing it?
If investing in the S&P 500 is such a surefire way to make money, then why isn't everyone doing it?
And if I'm wrong and everyone is actually doing it, how is it sustainable in the long run? I mean, we can't all be millionaires.
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It's not entirely without risk. 2008 saw the S&P lose over 30% for the year, and 2002 was over 20%. But it is up more often than down year-to-year, and it is usually up by at least 10%.
I found some good charts here, even though it is a EU site:
https://curvo.eu/backtest/en/market-index/sp-500?currency=usd
If you are investing for the long haul , you will take the occasional 30% haircut if you can get 10-20% the rest of the time. But it would suck if you got that 30% haircut just before you needed to sell....
If you got that 30% haircut just before you needed to sell
Yep. They key part is to invest for 20, 30, 40 years, where those consistent 10-20% gains compound and vastly outweigh the occasional 30% losses. Even if you had invested at the worst time in 2007, you are currently up 285%.
Even if you had invested at the worst time? That is precisely the best time to invest!
"The worst time in 2007" would've been the peak before the bottom fell out in 2008.
The bottom is the second best time to invest, after "every 2 weeks when I get my paycheck, regardless of the noise in finance media"
That worst was just before it fell (2008), not when it was already low.
Oh shit we got a buyhiguy here
But it would suck if you got that 30% haircut just before you needed to sell…
For the average middle class individual or family, they'll never sell all of their investments, but only small amounts each month to cover monthly expenses when they retire, so even in the situation of a 30% decrease, they're only selling off a fraction of a percent of their portfolio each month