Is it worth investing in things like S&P500?

[SleepDreamThinkHuge]

Hi, I wanted to know if it is worth investing in things such as the S&P500, other similar index funds, ETFs etc?

My current position is that I am nearly hitting 30. I earn not a lot. No debt and I could potentially invest around £1-£2k a year. I want to invest for the long term so around 25-30 years.

In the last 100 years, the market has averaged around 9 percent per year.

I was looking at an investment calculator, even if I start off with just £1,000 investment and invest £1,000 every year for 30 years assuming around 9 percent returns on average in 30 years time with compound interest the total returns would be £161,842.90 which is very good considering that £1,000 a year is not that risk of an amount.

What do you think? Is it something you already do?

www.calculator.net/investment-calculator.html?ctype=endamount&ctargetamountv=1000000&cstartingprinciplev=1000&cyearsv=30&cinterestratev=9&ccompound=annually&ccontributeamountv=1000&cadditionat1=beginning&ciadditionat1=annually&printit=0&x=85&y=38

100% yes. Use a stocks and shares ISA to do so as you won't be investing more than your ISA allowance.

People who save money in banks are mugs and are gradually losing money over time. Investments are a great way to beat Inflation provided your committed to saving long term.

I would recommend Vanguard personally. My weighting is 75% VUSA which is the S and P 500 and the other 25% is made up of global funds. I have returned 18 percent in nearly 2 years.

I would invest 50% in a SIPP and the remainder in an ISA. I would go for a Vanguard or Fidelity world equity tracker acc. The golden rule is never sell until you retire.

Absolutely invest but don’t assume you’ll be getting 9% a year. These last few years have been quite volatile and there have been periods I’ve been 20% plus down. You need to be sure you can cope with losses as well as gains.

The hard part is not selling when the price is down 20% or if you want to buy something for your kids.

I have 20k in Vanguard split 75% global fund and 25% S&P 500. Since investing 18 months ago, my fund has lost money. I've no intention of cashing it in,but psychologically it's quite hard to see your money worth less than it was. I don't check much now for that reason.

@MrsMigginsCat
@Beneficialchampion2
You both chose 75 /25 portfolios
What made you decide on this split ?

Bumping, as I was looking into investing with Vanguard.

Yes but be aware with some platforms like Vanguard Investor if you buy an ETF you have to buy in whole units. Index funds (OEICs) you can buy partial units.
VISA is currently £63.20 per unit.
US Equity Index you can buy in partial units and it includes majority of the S&P500 plus a couple of thousand other US stocks. Ongoing Charge is a little bit more.

Vanguard ISA and/or SIPP is easy to setup and pretty low cost. Good for starter investors.

Initially I had all £20k in the worldwide fund, but I'd been researching the S&P 500 and wanted to invest a bit, but not all my money in it. There was no real science or reason, only that at the time, 25% seemed about right for me.

I read the book by Tony Robbins : Money - Master the game

The key take from this book is to do exactly this.

Invest in a low cost S&P500 tracker. Some years you will be up 20%, some years down 20%, but the long term average is around 9.5% up

So yes do it.

One alternative is exact stock picking which is very hard and stressful.

The other alternative is buying “funds” but three quarters of all funds do not even match a low cost tracker so are risky for little reward.

yes - low cost tracker funds are a good long term investment.

I recommend looking into the 'Bogelheads' they have example portfolios, mostly US based but the principals are sound.
I would say a global fund is more suitable for a U.K investor, but the S and P is also good.
Just beware of performance chasing. The US has been the place to be the last 10 years but from 2000 to 2010 there was a lost decade of no growth so past performance is no indicator of future performance.

Absolutely yes. Just drip feed in £100 per month into something like Vanguard and choose the S&P 500 or FTSE All Share, and then sit back and do nothing. And during the inevitable periods when the stock market tanks, rejoice! It means your buying shares in the top 500 US companies ("units") at bargain bin prices, which means you are now paying less for the same amount of dividend as you were previous. And when when the market rises again, it's win-win. Some Vanguard options enable you to have the dividends automatically re-invested throughout the year, others you have paid into your ISA at the end of the year on 31 December.

Having all your money in cash right now is going to be a killer, given the obliterating effects of inflation we've been seeing. But don't take my word for it, have a listen to Warren Buffett, the greatest investor ever, no arguments allowed. Speak up fella: