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If you had invested in a fund that just tracked S&P 500, what would have been your, over, say, the last ten years, what would have been your returns? I can't fi

If you had invested in a fund that just tracked S&P 500, what would have been your, over, say, the last ten years, what would have been your returns? I can't figure out if this info is in the article. Are there low-fee funds that just track the S&P 500? That would seem to be the way to go for long-term investing? What such funds can I find? (taking into account as other comments in this thread point out that, yes, the S&P is actually actively managed itself, sort of).

belter 4y ago
https://www.fool.com/investing/how-to-invest/index-funds/average-return/ https://www.fool.com/investing/how-to-invest/index-funds/ave... "...If you had invested $10,000 in the S&P 500 index in 1992 and held on with dividends reinvested, you'd now have more than $170,000. The market volatility in 2022 could cause this return to decline somewhat. However, the index has proven to be a winner over the long term..."
- jrochkind1 4y ago
  OK thanks! now to figure out how to calculate that as an annual rate of return (APY?) Sounds like this was through 2021, already a bit old? If I plug this into a random calculator on the web without knowing what I'm doing, $10K to $170K over 20 years looks like... around 15.25%? That does seem quite high, can that be right?
  - belter 4y ago
    Like Warren Buffet said...nothing like just buying the index and enjoying it... https://www.investopedia.com/ask/answers/042415/what-average-annual-return-sp-500.asp https://www.investopedia.com/ask/answers/042415/what-average... "The average annualized return since adopting 500 stocks into the index in 1957 through Dec. 31, 2022, is 10.15%." "Over the past 20 years (2002 to 2022), the average annualized return on the S&P 500 is 8.19%."
    - jrochkind1 4y ago
      Thanks, that seems more realistic than the 15% I incorrectly came up with. 10% is what I had in my head as a very good but possible managed fund return -- and only 8% over the past 20 years instead of an unrealistic 70. This seems like a more realistic expectation. So a conclusion might be: if you've been getting less than 8% (after fees) over ~10 years in any managed fund... you might want to reconsider your investments, seems like. But if you've been getting 8-10% or more, you're pretty good. Does that make sense?
      - belter 4y ago
        I hope you realize these are extraordinary returns. Show me an active manager that can demonstrate consistent 8% returns over the last 20 years, and I will be at their door next Monday 08.00 AM.
        jrochkind1 4y ago
        I _think_ I know of one but I may be misinterpreting. But then, if you know this... have you switched any actively managed to funds to an S&P index fund? Why would this not be the obvious thing to do?
        belter 4y ago
        Investing with S&P index fund is the obvious thing to do. :-)
        jrochkind1 4y ago
        This page from Jan 2022 suggests average fund returns over the previous 15 years (so that did include the bear market 2008, at that point, the article mentions) for "U.S. Large-Cap Stock" was 9.73% https://www.thebalancemoney.com/what-is-the-average-mutual-fund-return-4773782 https://www.thebalancemoney.com/what-is-the-average-mutual-f... It does note that that includes "the average for all mutual funds, including index funds." But if the answer is "oh yeah, the index funds bring up the average a lot"... why would anyone use anything but an index fund? Is it going to be a lot lower than that over 20, even though that already includes 2008? I admit this is all pretty confusing to me. What returns would you consider acceptable over 10-20 years? Or do you not even look at past returns when deciding whether to keep your money in a given fund, or invest in a given fund?
  - reducesuffering 4y ago
    Use a tool like https://www.portfoliovisualizer.com/backtest-portfolio https://www.portfoliovisualizer.com/backtest-portfolio
- huhtenberg 4y ago
  But if you would've invested in SPY in 2000, your return would've been 0% until 2013 or thereabouts. I.e. the entry point matters a lot.
  - M3L0NM4N 4y ago
    I mean, most people don't just invest all their savings in the stock market at once. Continually investing over time, or DCA, is super important.
    - Quarrel 4y ago
      DCA works, but isn't super important. If you win a lump sum, studies show that the best time to put it in the market is all of it right now, not trying to time the market or DCAing it into the market. Of course, you could get unlucky, so that you're initially in the 2000->2013 style window, but you can't know that at the time. Of course, most of us do / should invest smaller amounts over time, just because that is what our earning profile is like.
      - throw0101b 4y ago
        > Of course, you could get unlucky, so that you're initially in the 2000->2013 style window, but you can't know that at the time. 2000+ was only an issue for US-only, equity-only investors: if you were globally diversified you were fine. Even if you were US-only, but had at least 20% bonds, you were also fine: * https://www.forbes.com/sites/investor/2010/12/17/the-lost-decade-was-a-golden-age-if-you-rebalanced/ https://www.forbes.com/sites/investor/2010/12/17/the-lost-de...
      - cdavid 4y ago
        That somehow surprises me. Can you link such a study ?
        throw0101b 4y ago
        * https://ofdollarsanddata.com/dollar-cost-averaging-vs-lump-sum/ https://ofdollarsanddata.com/dollar-cost-averaging-vs-lump-s... * https://ofdollarsanddata.com/the-cost-of-waiting/ https://ofdollarsanddata.com/the-cost-of-waiting/ Author has a repo where he often shares the data/code used in generating analysis: * https://github.com/nmaggiulli/of-dollars-and-data https://github.com/nmaggiulli/of-dollars-and-data
- fogzen 4y ago
  Inflation adjusted return would be around $80,000, worse if you scope inflation to real estate and healthcare.
ForHackernews 4y ago
> Are there low-fee funds that just track the S&P 500? ...yes. Sorry, I don't mean to sound like a jerk, but is this really a question? There are dozens of them: https://www.thebalancemoney.com/the-cheapest-sandp-500-index-funds-2466451 https://www.thebalancemoney.com/the-cheapest-sandp-500-index... I'm continually astounded by techies who have so much money and so little idea what to do with it. It's not like this stuff is even hard, not compared to keeping up the latest JS nonsense: https://www.bogleheads.org/wiki/Main_Page#mp-gs-h2 https://www.bogleheads.org/wiki/Main_Page#mp-gs-h2
- jrochkind1 4y ago
  Thanks! You may be over-estimating how much money I have as a techie, I work in non-profit/academic sector. My retirement funds are relatively paltry compared to what you may assume about techies with so much money (but perhaps still more than US median for my age; googling says median US retirement savings across all working-age households is $95,776), and mostly in managed 401k/403b where I have previously just chosen "lifecycle funds". ¯\_(ツ)_/¯ People make a lot of assumptions about how much wealth random HN commenters or the HN audience in general have, and sometimes I start feeling like I'm really poor compared to all you techie multi-millionaires... but when I actually pay attention to comments, I realize, nope, a lot of HN is more like me (although probably often ashamed to say so).
  - dehrmann 4y ago
    If by "lifecycle funds" you mean target date funds, setting your allocation to 100% for your retirement year is the most reasonable strategy you can do.
    - havermeyer 4y ago
      FYI you may be better off using an index fund and then rebalancing into bonds or other fixed income options closer to retirement. See this article, for example. https://www.cnbc.com/2018/07/13/one-of-the-biggest-retirement-mistakes-investors-are-making-today.html https://www.cnbc.com/2018/07/13/one-of-the-biggest-retiremen...

belter 4y ago

https://www.fool.com/investing/how-to-invest/index-funds/average-return/ https://www.fool.com/investing/how-to-invest/index-funds/ave... "...If you had invested $10,000 in the S&P 500 index in 1992 and held on with dividends reinvested, you'd now have more than $170,000. The market volatility in 2022 could cause this return to decline somewhat. However, the index has proven to be a winner over the long term..."

jrochkind1 4y ago
OK thanks! now to figure out how to calculate that as an annual rate of return (APY?) Sounds like this was through 2021, already a bit old? If I plug this into a random calculator on the web without knowing what I'm doing, $10K to $170K over 20 years looks like... around 15.25%? That does seem quite high, can that be right?
- belter 4y ago
  Like Warren Buffet said...nothing like just buying the index and enjoying it... https://www.investopedia.com/ask/answers/042415/what-average-annual-return-sp-500.asp https://www.investopedia.com/ask/answers/042415/what-average... "The average annualized return since adopting 500 stocks into the index in 1957 through Dec. 31, 2022, is 10.15%." "Over the past 20 years (2002 to 2022), the average annualized return on the S&P 500 is 8.19%."
  - jrochkind1 4y ago
    Thanks, that seems more realistic than the 15% I incorrectly came up with. 10% is what I had in my head as a very good but possible managed fund return -- and only 8% over the past 20 years instead of an unrealistic 70. This seems like a more realistic expectation. So a conclusion might be: if you've been getting less than 8% (after fees) over ~10 years in any managed fund... you might want to reconsider your investments, seems like. But if you've been getting 8-10% or more, you're pretty good. Does that make sense?
    - belter 4y ago
      I hope you realize these are extraordinary returns. Show me an active manager that can demonstrate consistent 8% returns over the last 20 years, and I will be at their door next Monday 08.00 AM.
      - jrochkind1 4y ago
        I _think_ I know of one but I may be misinterpreting. But then, if you know this... have you switched any actively managed to funds to an S&P index fund? Why would this not be the obvious thing to do?
        belter 4y ago
        Investing with S&P index fund is the obvious thing to do. :-)
      - jrochkind1 4y ago
        This page from Jan 2022 suggests average fund returns over the previous 15 years (so that did include the bear market 2008, at that point, the article mentions) for "U.S. Large-Cap Stock" was 9.73% https://www.thebalancemoney.com/what-is-the-average-mutual-fund-return-4773782 https://www.thebalancemoney.com/what-is-the-average-mutual-f... It does note that that includes "the average for all mutual funds, including index funds." But if the answer is "oh yeah, the index funds bring up the average a lot"... why would anyone use anything but an index fund? Is it going to be a lot lower than that over 20, even though that already includes 2008? I admit this is all pretty confusing to me. What returns would you consider acceptable over 10-20 years? Or do you not even look at past returns when deciding whether to keep your money in a given fund, or invest in a given fund?
- reducesuffering 4y ago
  Use a tool like https://www.portfoliovisualizer.com/backtest-portfolio https://www.portfoliovisualizer.com/backtest-portfolio
huhtenberg 4y ago
But if you would've invested in SPY in 2000, your return would've been 0% until 2013 or thereabouts. I.e. the entry point matters a lot.
- M3L0NM4N 4y ago
  I mean, most people don't just invest all their savings in the stock market at once. Continually investing over time, or DCA, is super important.
  - Quarrel 4y ago
    DCA works, but isn't super important. If you win a lump sum, studies show that the best time to put it in the market is all of it right now, not trying to time the market or DCAing it into the market. Of course, you could get unlucky, so that you're initially in the 2000->2013 style window, but you can't know that at the time. Of course, most of us do / should invest smaller amounts over time, just because that is what our earning profile is like.
    - throw0101b 4y ago
      > Of course, you could get unlucky, so that you're initially in the 2000->2013 style window, but you can't know that at the time. 2000+ was only an issue for US-only, equity-only investors: if you were globally diversified you were fine. Even if you were US-only, but had at least 20% bonds, you were also fine: * https://www.forbes.com/sites/investor/2010/12/17/the-lost-decade-was-a-golden-age-if-you-rebalanced/ https://www.forbes.com/sites/investor/2010/12/17/the-lost-de...
    - cdavid 4y ago
      That somehow surprises me. Can you link such a study ?
      - throw0101b 4y ago
        * https://ofdollarsanddata.com/dollar-cost-averaging-vs-lump-sum/ https://ofdollarsanddata.com/dollar-cost-averaging-vs-lump-s... * https://ofdollarsanddata.com/the-cost-of-waiting/ https://ofdollarsanddata.com/the-cost-of-waiting/ Author has a repo where he often shares the data/code used in generating analysis: * https://github.com/nmaggiulli/of-dollars-and-data https://github.com/nmaggiulli/of-dollars-and-data
fogzen 4y ago
Inflation adjusted return would be around $80,000, worse if you scope inflation to real estate and healthcare.

ForHackernews 4y ago

> Are there low-fee funds that just track the S&P 500? ...yes. Sorry, I don't mean to sound like a jerk, but is this really a question? There are dozens of them: https://www.thebalancemoney.com/the-cheapest-sandp-500-index-funds-2466451 https://www.thebalancemoney.com/the-cheapest-sandp-500-index... I'm continually astounded by techies who have so much money and so little idea what to do with it. It's not like this stuff is even hard, not compared to keeping up the latest JS nonsense: https://www.bogleheads.org/wiki/Main_Page#mp-gs-h2 https://www.bogleheads.org/wiki/Main_Page#mp-gs-h2

jrochkind1 4y ago
Thanks! You may be over-estimating how much money I have as a techie, I work in non-profit/academic sector. My retirement funds are relatively paltry compared to what you may assume about techies with so much money (but perhaps still more than US median for my age; googling says median US retirement savings across all working-age households is $95,776), and mostly in managed 401k/403b where I have previously just chosen "lifecycle funds". ¯\_(ツ)_/¯ People make a lot of assumptions about how much wealth random HN commenters or the HN audience in general have, and sometimes I start feeling like I'm really poor compared to all you techie multi-millionaires... but when I actually pay attention to comments, I realize, nope, a lot of HN is more like me (although probably often ashamed to say so).
- dehrmann 4y ago
  If by "lifecycle funds" you mean target date funds, setting your allocation to 100% for your retirement year is the most reasonable strategy you can do.
  - havermeyer 4y ago
    FYI you may be better off using an index fund and then rebalancing into bonds or other fixed income options closer to retirement. See this article, for example. https://www.cnbc.com/2018/07/13/one-of-the-biggest-retirement-mistakes-investors-are-making-today.html https://www.cnbc.com/2018/07/13/one-of-the-biggest-retiremen...