S&S tracker

Sam_J12

dunstonh wrote: »

That would be pretty poor quality investing. A single sector fund (whether tracker or active) is poor investing. You either need a multi-asset solution (which can be made up of passives or active of combination) or you need to build a portfolio of single sector funds. Not a single tracker.

I disagree. Investing in a single S&P 500 tracker has proven to be exceptionally good quality investing.

dunstonh

Sam_J12 wrote: »

I disagree. Investing in a single S&P 500 tracker has proven to be exceptionally good quality investing.

No. That is bad quality investing.

bigadaj

Sam_J12 wrote: »

I disagree. Investing in a single S&P 500 tracker has proven to be exceptionally good quality investing.

It's far better than holding a single ftse all share or 100 tracker, but a long way from perfect.

Sam_J12

bigadaj wrote: »

It's far better than holding a single ftse all share or 100 tracker, but a long way from perfect.

The US economy has proven consistently for over a century to be incredibly robust and dynamic and has outstripped the growth of just about all other markets in the world. There is no particular reason to believe that this won't continue. The US has always been, and continues to be a great bet for the future. Investing in non-US stocks for "diversity" is unlikely to significantly reduce volatility due to the markets being so correlated and will likely reduce returns in the long term. The S&P 500 already draws around half of its income from overseas markets anyway, and is extremely well diversified across sectors.

If the S&P500 and US market is good enough for Jack Bogle, the grandfather of passive investing, and Warren Buffet, the greatest investor of all time, then it is good enough for me.

Malthusian

The US economy has proven consistently for over a century to be incredibly robust and dynamic and has outstripped the growth of just about all other markets in the world.

The same was true of Germany in 1914.

This does not mean that I think the US will lose a devastating war next year, I just like the thought that if they do it won't be my entire life savings down the toilet.

Superscrooge

The Japanese stock market showed stupendous growth for many years, especially in the late 1980's until it all went pear-shaped!

http://www.tradingeconomics.com/japan/stock-market (click on historical and max if you want to see the graph)

Nothing wrong with S&P500 but always best not to put all your eggs in the same basket.

dunstonh

The US economy has proven consistently for over a century to be incredibly robust and dynamic and has outstripped the growth of just about all other markets in the world. There is no particular reason to believe that this won't continue. The US has always been, and continues to be a great bet for the future.

For most of the 20th Century, the US was effectively the emerging market. in the 21st Century it is not. In the century before that the UK was the dominant market.

To invest 100% into one sector (in this case US equity but could be any sector) is bad quality investing. You are putting all your money into one country/region and at risk of localised events and gambling that US equity is going to be the best sector each and every year.

Since 2001, US large cap has not been the top performing sector in any year. It hasnt been the worst performing in any year either. It has been a bottom half performer in 8 years and a top half performer in 6 years. Looking at the spread, 2001-2009 were mostly mid to lower. 2013 and 2014 in particular were very good.

You do not measure quality by getting lucky in a period.

European equity dominated returns from 2003 to 2007. If you invested 100% in European Equities in that period you would have had the best returns. However, that too is not good quality investing. (3 of the 4 years that followed saw near bottom sector returns)

If the S&P500 and US market is good enough for Jack Bogle, the grandfather of passive investing, and Warren Buffet, the greatest investor of all time, then it is good enough for me.

Warren Buffet is a value investor and is global minded. So, not at all like the S&P500. However, he directs his statements to the US and in the US, investors are very inward looking and taxation of assets is different to the UK. So, you cant read comments aimed at low skilled US investors as what he would do.

So, if you wanted to emulate WB then you would focus on value and global markets.