With the three large indexes that slip in recent weeks, it may not seem like the best time to invest in shares. It is always more tempting to buy when we see a certain stock or assets rise, because we can easily imagine our returns if the momentum continues. The idea is to jump on the bandwagon and see your investment take off immediately.
But no matter how strange this sounds in the first instance, to really score an investment gain, one of the best things to do is consider buying during these periods of uncertainty. Why? Because high -quality shares and other assets may act against bargain prices, which means that you can pick them up for a number and take advantage as soon as they recover and go in the long term.
It is important to remember that elements generally disturb the market – from a government policy decision to increase inflation or a recession – will not last forever. Nowadays, investors are concerned about President Donald Trump’s rates about import from China, Canada and Mexico and the impact that will have on the economy and the business profits.
This can indeed represent a headwind, but high -quality companies will be able to manage these times and get ahead. Given this, the SPDR S&P 500 ETF Trust(Freshly sampled: spy) – a bet on the S&P 500 – The smartest investment you can make today? Let’s know.
Image source: Getty images.
First let’s talk a bit about this type of investment. It is an exchange fund (ETF), an instrument that includes many different shares based on a certain theme, such as retail or biotech, or according to the presence of the player in a certain index, the latter is the case with the fund we are talking about today.
Just like shares, ETFs act on the market daily. So if you are familiar with buying shares, you can buy an ETF in exactly the same way. The only thing to be aware of is that ETFs come up with a management allowance expressed as a cost ratio. To maintain your profit over time, you go for an ETF with a cost ratio of less than 1%. With a ratio of 0.09%, the SPDR S&P 500 ETF is largely in the account.
Now we will specifically consider this ETF and whether it is a smart buy for you. The SPDR S&P 500 ETF follows the performance of the S&P 500, so it is really a bet on the total stock market. It is important to remember that this index includes the top companies that manage the current economy and regularly make adjustments to ensure that this is always the case. So by investing here, you will always be exposed to the leaders of the moment.
Of course you will probably see this ETF falling during the Market Market – as is the case today. In the last two and a half weeks in Lockstep with the S&P 500, it is pushed more than 6%. In times like this, certain individual shares in your portfolio can perform better. For example, as the total market dropped, shares, including drink giant Coca-Cola and pharma -power patient Abbviemade progress last month. That is why it is a great idea to diversify about companies and industries – and about shares and ETFs.
Spy data by Ycharts.
But if you can only make one investment at the moment, the smartest step can be to pick up a few shares from the S&P 500 ETF SPDR, and here is why. The price, taking into account recent decreases, has fallen. But even more important, this purchase offers you exposure to an index that has shown resilience 100% of the time in history.
After each period of decline, the index has been restored and risen over time. In fact, the S&P 500 has yielded an average return of more than 10% since the launch as an index of 500 companies in the late 1950s.
It is impossible to time the market and pick up a share or an ETF at the lowest point, but here is good news: the track record of the S&P 500 offers us reason to be optimistic about returns over time when we invest in it at any time. And that is why the SPDR S&P 500 ETF Trust is currently making a fantastic purchase – even if the S&P 500 will continue in the short term.
Before buying shares in SPDR S&P 500 ETF Trust, consider this:
The Motley Fool Stock Advisor Analyst team has just identified what they believe are the 10 best shares For investors to buy now … and SPDR S&P 500 ETF Trust was not one of them. The 10 shares that made the cut can produce sample returns in the coming years.
Consider when Nvidia made this list on April 15, 2005 … If you have invested $ 1,000 at the time of our recommendation, You would have $ 690,624!**
Now it is worth mentioningInventorThe total average return is821%-A market-changing outperformance compared to167%For the S&P 500. Don’t miss the latest top 10 list, available if you become a memberInventor.
See the 10 shares »
*Stock Advisor Return on March 3, 2025
Adria Cimino has no position in one of the aforementioned shares. The Motley Fool has positions and recommends Abbvie. The Motley Fool has a disclosure policy.
Does the SPDR S&P 500 ETF trust the smartest investment you can make today? was originally published by the Motley Fool
