I know you’re probably feeling anxious about the stock market these days. You’re not the only one.
The S&P 500 has been on a wild ride of highs and lows in the past year, and many people are worried that it will get worse in 2023.
A recent survey from Allianz Life found that 77% of U.S. adults are afraid of severe market volatility, while 62% think a recession is coming soon.
(What do you know? I’m part of the minority. I love volatility!)
And almost two-thirds say they’d rather keep their money in cash than face market swings.
I understand how you feel, but don’t let fear stop you from investing.
The market is more resilient than you think, and there’s one amazing reason to be optimistic about the future based on history.
This is what history says about the S&P 500
The stock market has been a wild ride for almost a year now. Sometimes it feels like we’re losing money faster than we can make it.
But don’t let the short-term swings get you down.
There’s plenty of evidence that shows that index funds always pays off in the long run.
A company called Crestmont Research did some digging, and found out that the S&P 500 never had a negative return over any 20-year period since 1900.
That means no matter when you started investing in an S&P 500 fund or ETF, you would have made money if you held on for 20 years.
That’s pretty amazing, considering we’ve been through some tough times in the past two decades.
We’ve seen two of the biggest crashes ever: the dot-com bust and the Great Recession.
And yet, the S&P 500 is still up by a whopping 144% since 2000 (even with the recent downturn).
So what does this mean for you?
It means if you invested in an S&P 500 fund or ETF in 2000 and stayed calm through all the drama, you’d have more than doubled your money by now.
So where to put money now?
If you’re feeling anxious about the market swings or just want an investment you can trust to protect your money, an S&P 500 ETF or index fund is a great option.
This kind of investment follows the market itself, which means it has the same stocks as the index and tries to match its performance.
Since you can’t invest in the actual index, an ETF or index fund is the next best thing.
All index funds follow the same index, so they’re going to have similar long-term returns.
But some of the best ones are:
Vanguard S&P 500 ETF (NYSEMKT: VOO) iShares Core S&P 500 ETF (NYSEMKT: IVV) SPDR S&P 500 ETF Trust (NYSEMKT: SPY)
The Vanguard S&P 500 ETF is especially good because of its low fees. Its expense ratio is only 0.03% – one of the lowest among ETFs – which could save you a lot of money in fees over time.
No matter where you invest, it’s smart to think long-term.
The market could be rocky for a while. But if you invest in an S&P 500 ETF and keep it for at least 20 years, you’re almost sure to make money.
As Warren Buffett once said, “Be fearful when others are greedy and greedy when others are fearful.”
This is the perfect time to be greedy and invest in an S&P 500 ETF.
The market may be volatile, but history shows that it always recovers and rewards those who stay invested.
Don’t let this opportunity pass you by.
Invest now and reap the rewards later.
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