Feb 6, 2022

Cory Diary : Danger of S&P500 Index

The S&P 500 is littered with many instances of long period of down time where investor hold on to zero to very low yield stocks for many years. Examples below on most recent ones.

First Picture is 6 years wait.

Your wait will be extended by another 7 years if you buy in Year 2000 peak.

That's total of 13 years and with only a little profits. Not sure will there be after currency exchange rate ?

For this number of years in Dividend investing stocks, an investor has good chance to double their returns assuming just 5% yield. Currently Market is trading 5.5% yield for strong reits. Not saying S&P500 will repeat this stunt. Just to highlight the danger. Maybe one should DCA or do proper diversifications. Maybe stock picking is a good idea ? The index is still cool. Just be aware what we are walking into as not many can wait even for 3 years.



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Articles in this Blog is personal take and sharing purposes only. Reader should seek their own professional help when making financial decision and be responsible for their decision.

1 comment:

  1. As they say, nobody knows. Neither do I but this would be a good outcome in my books.

    The more dangerous one is a sharp drop then drift downwards for next 10+ years due to the twin pincers of inflation and debt (govt & company).