Thoughts on S&P 500 Tech fund

fletcher1985

Someone i work with has put about 1k in this fund without really knowing much about it or investing. Does anyone have or have ever invested in to this got any advice whether this was a bad idea? 

El_Torro

Global trackers make a lot more sense than investing in the top 500 companies in the US. These companies do make up a large percentage of total global markets, though that's not a reason to ignore the rest of the world (and arguably other US companies). 

The S&P 500 has done very well in the last 10 years or so. That doesn't necessarily mean it will do well in the next 10 years though.

eskbanker

fletcher1985 said:

Someone i work with has put about 1k in this fund without really knowing much about it or investing. Does anyone have or have ever invested in to this got any advice whether this was a bad idea? 

My advice to them would be to learn about investing, and from a better source than a work colleague who also doesn't know much about it (no offence!).

sevenhills

It is rather specialised, it wouldn't be what I invested in, but it could give good results.

I wouldn't put all my money in USA dollars or tech.

fletcher1985

eskbanker said:

fletcher1985 said:

Someone i work with has put about 1k in this fund without really knowing much about it or investing. Does anyone have or have ever invested in to this got any advice whether this was a bad idea? 

My advice to them would be to learn about investing, and from a better source than a work colleague who also doesn't know much about it (no offence!).

im not learning from them? and that wasn't my question i was asking if it was a good decision or possibly not

dunstonh

fletcher1985 said:

Someone i work with has put about 1k in this fund without really knowing much about it or investing. Does anyone have or have ever invested in to this got any advice whether this was a bad idea? 

Extremely high risk and high reward.  Around 90% loss potential.

gravel_2

El_Torro said:

Global trackers make a lot more sense than investing in the top 500 companies in the US. These companies do make up a large percentage of total global markets, though that's not a reason to ignore the rest of the world (and arguably other US companies). 

The S&P 500 has done very well in the last 10 years or so. That doesn't necessarily mean it will do well in the next 10 years though.

S&P 500 Tech tends to be an index of around 60-70 companies within SPX. Everything else you've said is probably valid, but it's even more narrow as it's betting on a particular industry, not just a country.

Stargunner

dunstonh said:

fletcher1985 said:

Someone i work with has put about 1k in this fund without really knowing much about it or investing. Does anyone have or have ever invested in to this got any advice whether this was a bad idea? 

Extremely high risk and high reward.  Around 90% loss potential.

When did the S&P 500 last go down by anywhere near 90%?

EthicsGradient

This is about the "Tech" fund - presumably tracking the S&P 500 Information Technology Index.

SS-T | S&P 500 Information Technology TR Ix | FastTrack Index Performance Chart

On 27 Mar 2000, it was at 1005.48; 9 Oct 2002 it had fallen to 176.66. So that's a fall of 82% that's already happened, after a tech bubble, which some suspect we could have now.

masonic

Stargunner said:

dunstonh said:

fletcher1985 said:

Someone i work with has put about 1k in this fund without really knowing much about it or investing. Does anyone have or have ever invested in to this got any advice whether this was a bad idea? 

Extremely high risk and high reward.  Around 90% loss potential.

When did the S&P 500 last go down by anywhere near 90%?

S&P500 Tech would be closer to NASDAQ100 than S&P500, which went down somewhere near 90% in the early 2000s.

Incidentally, someone I work with started investing in a similar fund about a year before the pandemic. Despite me trying to counsel them to diversify, they told me that was pointless as US Tech was where all the returns were going to be from now. It just took a 20% drop to shake them out of the market, and then because the fund bounced back really quickly, they didn't have time to capture the upside and concluded investing is a mugs game and now focus on BTL. Go Figure!

eskbanker

fletcher1985 said:

eskbanker said:

fletcher1985 said:

Someone i work with has put about 1k in this fund without really knowing much about it or investing. Does anyone have or have ever invested in to this got any advice whether this was a bad idea? 

My advice to them would be to learn about investing, and from a better source than a work colleague who also doesn't know much about it (no offence!).

im not learning from them? and that wasn't my question i was asking if it was a good decision or possibly not

Hence "my advice to them...."!  It's impossible to say whether or not it's a good decision, with nothing to go on about their circumstances....