Investing / S&P 500 fund is low risk?
Jul 31, 2022
S&P 500 fund is low risk?
Some tell me that if my time frame to invest is 20+ years investing in the S&P 500 is the way to go and low risk. How is that the case? I not a risk taker nor a risk hater - so more middle of the road when it comes to risk, or moderate. I also plan to save and invest for retirement for 30+ years. Thanks!
Replies (3)
Jul 31, 2022
@Hamid4C3, The length of time you plan to invest is the key here! If you're looking at a few days, months or years even, it's higher risk because the probability of loss is high. But if you're looking at it from a long term perspective - as you are - there is low probably of loss.
J
2,861
Jul 31, 2022
@Hamid4C3, Agree with Vinny. Over the last 91 years, the S&P 500 had a negative return in 27% of those years. Investments held for a short 1-year period resulted in negative results more often than investments held for longer periods. Take a look at this short piece the Finny team wrote about this.
You may find this lesson relevant and helpful.
Click on it below and a new tab will open and take you directly to the lesson.
What is the S&P 500?
Investing Basics
6 min