INVESTING - S&P 500 INDEX FUND vs NASDAQ STOCK EXCHANGE
INVESTING - S&P 500 INDEX FUND vs NASDAQ STOCK EXCHANGE
Comments
As someone who has invested in the New York Stock Exchange for over 7 years now I am now getting into the S&P 500. Great advice by the way.
S&P 500 is an awesome index. It's what Warren Buffett advises people invest in. He's even instructed his heirs to invest 90% in it. I believe that's very good advice.....
Thanks.
Thanks for the video...I like your quickie one issue jobs. Hit and Git.
If you've got a lot of money to invest and you want long term stability but also growth, search up dimensional fund advisors. They have a great website.
Just an FYI folks - and also I don't give advice nor am I shilling any indexes or index fund investing.
Be aware that there are two ways to gain broad ETF or fund exposure to NASDAQ companies and they are commonly confused and/or seen as the same but quite different in makeup. The NASDAQ composite index (COMP.X) is made up of ALL of the companies traded on that exchange - about 3000 companies. The NASDAQ 100 index (NDX.X) is made up of the 100 largest non financial companies traded on that exchange (actually it's 107 names). So be sure which you are seeking exposure to and if/how there is any overall with other indexes or products.
Also, be aware there are other alternatives for broad market large cap exposure other than the S&P 500 or Dow 30 which are more comprehensive. The Wilshire 5000 is an index comprised of most all stocks traded in the US (actually I think at present it's a bit less than 4000 issues and the count does change from time to time of course). There is also the Russell 3000 which is comprised of both the Russell 2000 and 1000 indexes and is also basically all US stocks. FYI the Russell 2000 is the 2000 smallest cap companies in the 3000 and the 1000 the 1000 largest. There are also funds and ETF products that track the S&P 1500 index which is comprised of the S&P 500, 400, and 600 indexes combined, which are Standard and Poor's large, mid, and small cap indexes again comprising basically all US stocks.
I would rather own the S&P than bonds that's for sure. At least stocks are a hedge against inflation. But most American stocks are overvalued, so I would assume the indexes would be as well. The fact that it has gone up a lot isn't enough reason for me to buy it. Actually, that makes me more nervous that it has.
I think buying an index is like the S&P is like betting on the overall success of the American economy. For a long time that was a good bet because we were so productive and generated a lot of wealth. Now it seems like everything is sustained by debt, inflation, buybacks, & cheap money... can it last forever?
I favor the international indexes. I know other countries have a lot of the same problems, but at least you are diversified in your political risk.
S&P 500... The components of the S&P 500 are selected by committee. This is similar to the Dow Jones Industrial Average, but different from others such as the Russell 1000, which are strictly rule-based. When considering the eligibility of a new addition, the committee assesses the company's merit using eight primary criteria: market capitalization, liquidity, domicile, public float, sector classification, financial viability, length of time publicly traded and listing exchange. The committee selects the companies in the S&P 500 so they are representative of the industries in the United States economy. In order to be added to the index, a company must satisfy these liquidity-based size requirements: market capitalization is greater than or equal to US$5.3 billion annual dollar value traded to float-adjusted market capitalization is greater than 1.0 minimum monthly trading volume of 250,000 shares in each of the six months leading up to the evaluation date. The securities must be publicly listed on either the NYSE (NYSE Arca or NYSE MKT) or NASDAQ (NASDAQ Global Select Market, NASDAQ Select Market or the NASDAQ Capital Market). Securities that are ineligible for inclusion in the index are limited partnerships, master limited partnerships, OTC bulletin board issues, closed-end funds, ETFs, ETNs, royalty trusts, tracking stocks, preferred stock, unit trusts, equity warrants, convertible bonds, investment trusts, ADRs, ADSs and MLP IT units
Ozzy
S&P hands down. Safe is big and broad than If Needed increase complexity and sophistication later The SP500 are a good chunk of the companies that control (big) the world (broad). Initially avoid betting on The Canary in the Coal Mine. Or The Lost Puppy in the Forrest of Wolves 1) Indexes odds are the Sun will not explode and if it does your problems are actually over :-) 2) Sectors 3) Industries 4) Specifics stocks home runs and strike outs