Are there any reasons not to invest in this?

wmb194

Dannydee333 said:

Based on what I've heard here, I should probably consider global, but the robots (ChatGPT) still suggest the S&P 500, for what it is I'M trying to achieve... and before anyone comes at me for relying on that as a source, it scans the entire web for all required and relevant info.

I'll still recondider tho.

What question did you ask it?

Dannydee333

From the robots:

20-Year Comparison

S&P 500 vs Global Index (FTSE Global All Cap / MSCI World)**

To keep it clean, we’ll compare:

• S&P 500 (VUSA/VUAG style)
  vs

• Global Index (World Tracker)

📌 Assumptions

• 20 years

• £500/month contribution (matches your likely plan)

• 7% annual return for S&P 500 (historic long-term real average ~10% nominal)

• 5% annual return for Global Index (historically ~2% below US)

📊 Results After 20 Years

Investment	Final Value	Total Contributed	Total Gain
S&P 500	≈ £262,000	£120,000	≈ £142,000 gain
Global Index	≈ £198,000	£120,000	≈ £78,000 gain

---------------------------

🔍 More realistic comparison if we use true historic returns

• S&P 500 long-term: 10% per year

• World Index long-term: 7–8% per year

At those numbers:

📊 True Long-Term Historic Comparison (20 years)

Investment	Final Value (10%)	Final Value (7.5%)
S&P 500	≈ £380,000	—
Global Index	—	≈ £260,000

Difference:
≈ £120,000 in favour of S&P 500.

This is why the FIRE community overwhelmingly uses S&P 500 as the core engine.

------------------------

Summary:

This is why US dominance is expected to continue**

• The US leads in innovation

• The US leads in tech

• The US leads in profitability

• The US leads in talent and capital

• The US recovers fastest

• The US attracts global investors

• The US makes up the majority of global market cap

• A global fund is mostly US anyway

• BUT a pure S&P 500 fund gives you the undiluted growth

--------------------

Thoughts on this? Is this inaccurate or misleading?

dunstonh

I watched the video and I'll read those later. The guy in the video says "only buy world equity index tracker" when I was planning on buying only U.S... I guess whether you go with world or U.S. comes down to what you are happy to take the risk on. One guy will say the US. is the best option, and another will say world, right?

If you are based in the US and live in US Dollars, then US equities makes sense.  
You are not living in US Dollars.

1 - Yes, I am a newbie to this, so your impression was correct. My level of knowledge comes down to posts shared on social media by FAs I follow, and having done a long, deep dive conversation with the robots (ChatGPT).

Yes, it is clear you are a newbie and its clear you are falling for recency bias.  Social media and ChatGPT are not the ways to look at suitability.  Social Media revenue is generated by views.     They jump on fashions to keep the views.

Would this suggest it's a better idea to invest in those 7 companies individually instead, or do you benefit from the magnificent seven as standard from being in the S&P 500?

What goes up 1057% in 5 years can go down just as quickly.      Sectors tend to revert to norm over time.   

That 1057% shown above has gone.   Most believe that tech is in a bubble.     The last tech bubble that burst saw tech values drop 90% from peak to trough, whilst the general markets fell by around 40%.

Based on what I've heard here, I should probably consider global, but the robots (ChatGPT) still suggest the S&P 500, for what it is I'M trying to achieve... and before anyone comes at me for relying on that as a source, it scans the entire web for all required and relevant info.

AI is a bit US centric.  And, remember, its data sources will reflect biases, fashions and recency.   
I did a check on ChatGPT, and I can confirm its bias, and it didn't take into account currency movements in its figures. 

You can see that 25-year performance of global and S&P500 for a UK investor on page 1 of this thread, and it's very similar despite the massive growth in recent years in tech.  We also know historically that global and US cycle each other.   Yet you seem to be ignoring the facts and relying on social media and AI.

eskbanker

Dannydee333 said:
2 - I have much more than 6-12 months of emergency money. I have 15k of a financial cushion, as well as my monthly 2.4k take-home income (and I'm putting an online business together).

Just to be clear, one of the main reasons for an emergency fund is to maintain your lifestyle (or even just survive) if you lose your employment income, so factor that into your planning if you're under the impression that £15K is a sizable buffer....

Eyeful

1. When I looked into it early this year I found that ChatGPT did not include up to date information.
Suggest you use more than one such chatbot. For example Perplexity.ai or Copilot.

2. Be careful with using chatbots, as I understand they can echo your thoughts and give you what you want to hear.

3. There are also "dumb ai chat bots" and "agent ai chat bots". I would only use the first type.
Ask your chat bot which type it is.

4. A typical Major Global Index would have 60%-65% in the S&P 500. So you would still be getting a large slice
of the MAG 7.

5. if you lived in the USA there is an argument that goes you only need the S&P 500.
If you live in the UK, a Major World Index may be a better choice.

6. Do not ne fooled into recency bias, as some newbies are. 
If you pan out in time you will find that the USA has not always been the best market to be in.

7 None of us can fore tell the future, the USA may or may not be the best place to be in over the next 20 years.
.You are in it for the long term, perhaps even 40 years!

masonic

It's worth remembering that until a very recent update to specifically correct it, ChatGPT was advising people that sodium bromide was a good substitute for table salt:

https://www.acpjournals.org/doi/10.7326/aimcc.2024.1260

I suspect its financial advice can be just as harmful as its medical advice.

Martico

By the look of it, you've restricted the Large Language Model to looking at the most recent 20 year period. The starting point coincides with the emergence from the dot com crisis, with tech in particular bouncing back from an extraordinary low. That's a pretty strong recency bias in the wider scheme of things

Dannydee333

So it's the first week of 2026 and I was hoping to open an account and begin investing but having read back through this, I'm now just as overwhelmed with what I should do as I was a couple of years ago when it was completely alien to me. I thought when I posted this 2 months ago I was confident in what I was planning to do, but now I'm not.

I wanted to start popping 300 quid a month into an account but now I'm not so sure. I'd probably be better just focusing on building my new online business and investing the 300 quid there instead of trying to have too many hands in too many pies.

Altior

The principle of regular investing in equities is perfectly fine, in fact it's very good. What the others were pointing out is that your investment choice is effectively betting on one element of the investing space. And on several measures, quite a risky one currently.

If you look at the portfolio breakdown of VUAG, the top individual stocks would each be taking up close to 7% of your portfolio. So it's quite concentrated. Ideally you'd be looking at less than half of that for a single stock. And tech is around a third! 

One thing to note is if those huge US domiciled tech companies that dominate the 500 catch a heavy cold, pretty much everything else will, in most other countries. It would lead to a global downturn, so it's quite difficult to de-risk from US tech, and remain in equities in my view. We had a preview of what that might look like with the 'tariff wars' last year.

PixelPound

Vanguard is expensive. 
VUAG has Total Expense Ratio (TER) of 0.07%
SPXL, the ACC S&P 500 from Spdr has TER of 0.03%

Looking at all world ones
Vanguard VWRP 0.19%
Invesco FWRG 0.15%
As most global ETFs are 60%+ in US stocks, an alternative is to pair the S&P with an Ex-USA one, eg XMWX or XUSE both have TER of 0.15% to both lower your fees and allow you to reduce US influence if you like.
60% SPXL + 40% XMWX = 0.078% TER
50% SPXL + 50% XMWX = 0.09%
Either way cheaper than a single World fund and can choose how much exposure to US. However do remember that US dominance and growth is why it is over 60% of global market, though no one knows when that changes.
As always DYOR (do your own research) before investing and consider independent financial advice especially for large sums.