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Why is this only tracking the S&P 500? Wouldn't a saavy investor be choosing from a wider range of stocks than just the ones in the S&P?
by grammaton 16y ago
Why is this only tracking the S&P 500? Wouldn't a saavy investor be choosing from a wider range of stocks than just the ones in the S&P?
- jrockway 16y agoI think if you redid the chart with the S&P 1000, it would be about the same. Choosing specific stocks is meaningless: given perfect knowledge about events, of course you can make a ton of money. For example, your retirement plan in 1990 could have been "buy a million shares of Apple". You would be exceedingly wealthy today. But your plan could have been "buy a million shares of Wang", in which case, you'd be a welfare recipient. The key to getting rich is to be able to predict the future perfectly. This is difficult, so people average it out and choose something like the S&P 500. As this is a decent investment strategy, it's what the article shows.