Investment Theory
This theory is not going to be proven tonight, but here it is. The S&P500 index may not be the best basis investment. After considering the return on investment and the risk factor, the S&P500 might be a pretty bad choice. Considering in the last decade, the S&P500 has swung up 100%, back down 50%, wiping all the original gain, and swung back up almost 100% again, you might think that there is something a little more stable that would have similar returns, or even better.
I am interested in indexes, sector funds, etfs, treasury bonds and money markets. In that pool of dumb investments, investments that take no special skill to pick, there might exist a security that has a better long term investment characteristics than the S&P500. That is what I am setting out to demonstrate.
Who knows when that might happen.
March 21st, 2006 at 9:47 am
The S&P 500 index may not be the best choice but I would not call it a “pretty bad choice”. Worrying about the ups/downs of the market for a long-term couch potato investor just does not make sense. I suppose that assumes that the average investor in an S&P 500 index fund is a couch potato investor.
If you get market returns I think you are doing alright. If you beat the market you’re a superstar and why do you care about index funds in the first place?
But overall I hear you. You’re just trying to find something better. =\