vendredi 7 janvier 2022

Buy the S&P500!

Is it really worth it trying to find a good investment firm that will invest your money with a good performance? 

Of course, there are some good firms, but there are much more bad firms (surely 8 bad ones for 2 good). So, your chances are at least 80% to do worse than the S&P500 with a specific firm. And there is surely a substantial percentage of these firms that are simply fraudulent. Let's never forget this. 

Is it really worth it trying to invest by yourself? Making lots of mistakes buying crappy stocks that you should never buy and having lots of stress about the market? Doubting constantly about your stocks, trying to find something better, buying at the worst moment, selling at the worst moment? Having a performance most of the times worse than the S&P500. Sometimes better, but with lots of effort or chance. 

Buffett said that and many others said that. And now, having seen the performance of many firms for the recent years, I'm pretty sure about it: the S&P500 (SPY) or any index that reproduces its performance is the best place to put your money. 

Wether you own 5000$ or 1 billion dollars, just put it all there and stop thinking about it. Collect your annual 10%, year after year, until you die, without any effort. 

That index doesn't try to look smart. Or doesn't try to impress you. Or doesn't show you made up numbers.

Many investment firms try to do all that. 

4 commentaires:

  1. I'll probably tap out soon and just invest most of my money in an index or two. I think RY and TD do better than the S&P 500 too if you include dividend reinvestment. Fortis is very comparable to the S&P 500 too. This is what I've gathered from looking at the charts from the last 20 years.

    1. I can think of many companies that are way superior to canadian banks. So, in that view, why not Google or Abbott Labs instead of RY and TD? We could argue a long time about our favorite names. Truth is that S&P500 is not a question of taste while your picks and mine are a question of taste.

    2. The reason why I mentioned the banks is because of their reputation for being safe similar to a S&P 500 ETF. They are individual companies but the government would suck dick and bend over before they let them fall. Also, you don't have to worry about currency differences and management fees. Canadian banks are basically the Canadian version of the S&P 500 ETFs as far as know-nothing investors are concerned.

      So it's not about them being better, but maybe they are, it's about their level of safety as well which seems comparable to a S&P 500 ETF.

  2. I'm gonna get my pet monkey, Bubbles, to pick stocks out of a hat for me.
    Betcha I'll do better than an S&P etc!!!