• The above Banner is a Sponsored Banner.

    Upgrade to Premium Membership to remove this Banner & All Google Ads. For full list of Premium Member benefits Click HERE.

  • Join The Silver Forum

    The Silver Forum is one of the largest and best loved silver and gold precious metals forums in the world. Join today for FREE! Browse the sponsors topics (hidden to guests) for deals and offers, check out the bargains in the members trade section and join in with our community reacting and commenting on topic posts. If you have any questions whatsoever about precious metals collecting and investing please join and start a topic and we will be here to help with our knowledge :) happy stacking. 

MrGeorge

Index fund vs other investments

Recommended Posts

Starting looking into the s and p 500 and the global stock index fund am i missing something looking at them they seem to good to be true. You basically dump 1000 a month into one and you get roughly 1 million after 21/22 years. Is it really that simple ? And is everyone doing this and im just late to the party. This seems like a better long term investment that any other ive seen. 

Share this post


Link to post
Share on other sites

I'm not sure where you're getting 1M from.

If you're new-ish to investing, take a look at Compound Interest.

 

Investing $1000 a month for the next 22 years would only yield $1m if you achieved over 10.5% growth every single year, without fail.  That is highly unlikely, in itself.

 

Investopedia has some really great guides on this, maybe check them out?

Share this post


Link to post
Share on other sites

It really is that simple MrG :)

If you dump £1000 into my bank account every month (I'll PM you the details) for the next 22 years, I promise to give you £1M.

You can't be more simple than that, can you? ;)

Edited by Roy

Share this post


Link to post
Share on other sites

S and p 500 averages 10% gain long term been looking at the last 200 year graphs and with compound interest you basically get your million after 21/22 years after doing 1000 a month thats why everyone recommends s and p 500 for new investors 

Share this post


Link to post
Share on other sites
1 hour ago, Roy said:

It really is that simple MrG :)

If you dump £1000 into my bank account every month (I'll PM you the details) for the next 22 years, I promise to give you £1M.

You can't be more simple than that, can you? ;)

Looking for serious conversation so please dont reply to my posts

Share this post


Link to post
Share on other sites

Check the blurbs on HL.co.uk especially SIPPS and focus on their Wealth 150 funds.
Investing £1,000 per month can and has made many investors considerably richer than they would otherwise be.
However with most investments, if not all, there is risk and some investments could loose all your cash so that's why investing in multiple funds of funds is considered smart provided all your growth isn't taken away by greedy advisors and fund managers so do your homework.
 

Share this post


Link to post
Share on other sites
7 minutes ago, Pete said:

Check the blurbs on HL.co.uk especially SIPPS and focus on their Wealth 150 funds.
Investing £1,000 per month can and has made many investors considerably richer than they would otherwise be.
However with most investments, if not all, there is risk and some investments could loose all your cash so that's why investing in multiple funds of funds is considered smart provided all your growth isn't taken away by greedy advisors and fund managers so do your homework.
 

Yea ive been reading up as much as i can over the past few weeks think im leaning towards vanguards global stock index fund just trying to figure out how much to go in for each month, would still like to buy some gold but the power of compound interest is just so tempting 😆 

Share this post


Link to post
Share on other sites
7 minutes ago, MrGeorge said:

Yea ive been reading up as much as i can over the past few weeks think im leaning towards vanguards global stock index fund just trying to figure out how much to go in for each month, would still like to buy some gold but the power of compound interest is just so tempting 😆 

Compound interest and tax free growth is even better so take full advantage of ISAs and SIPPs.

Share this post


Link to post
Share on other sites
2 hours ago, MrGeorge said:

Starting looking into the s and p 500 and the global stock index fund am i missing something looking at them they seem to good to be true. You basically dump 1000 a month into one and you get roughly 1 million after 21/22 years. Is it really that simple ? And is everyone doing this and im just late to the party. This seems like a better long term investment that any other ive seen. 

You need to take the charges, albeit small I imagine for a tracker, and the cost of inflation from your calculations. Not sure what amount of inflation you want to assume, maybe 2.5% for example. Let's say the 10% is now down to 7%. Try the calculation again to see the real value of the money in 20 odd years time. You may be late to the party, not sure what age you are, I access these kind of funds via a SIPP, not without it's problems though, especially if Labour get in and start faffing with the amount of tax relief that's available.

Share this post


Link to post
Share on other sites

The FTSE All share has appreciated annually on average near to that figure since forever, I think 9% including dividends. Its figures like this that make me believe the stock market as a broad investment, attempting to be as diversified as possible with the aim of capturing human capital activity is one the most sure fire ways of generating wealth long term. I have not long been of this opinion though as most of my investing efforts have been in stock picking which can yield much better results, but for the occasional mistake (which happens from 'time to time' in my case :P). Capturing capitalism I believe this theory is called and it has become extremely easy since low cost trackers became widely available. 

I have a SIPP with this strategy at its core, just buy and hold, capture capitalism, be diversified as possible, west/east, emerging, established, the good, the bad, just get the lot and as humanity grows and produces, you take a bit of that production and ingenuity through exposure to it through the companies that drive and profit from it. Capitalism has a good track record and I think its fair to say have been positive on balance, sure there are bad years, but there are more good than bad. Some of the trackers I use are charging 0.06-0.07% per year (on top of platform costs but still!). 

Share this post


Link to post
Share on other sites
Just now, KDave said:

The FTSE All share has appreciated annually on average near to that figure since forever, I think 9% including dividends. Its figures like this that make me believe the stock market as a broad investment, attempting to be as diversified as possible with the aim of capturing human capital activity is one the most sure fire ways of generating wealth long term. I have not long been of this opinion though as most of my investing efforts have been in stock picking which can yield much better results, but for the occasional mistake (which happens from 'time to time' in my case :P). Capturing capitalism I believe this theory is called and it has become extremely easy since low cost trackers became widely available. 

I have a SIPP with this strategy at its core, just buy and hold, capture capitalism, be diversified as possible, west/east, emerging, established, the good, the bad, just get the lot and as humanity grows and produces, you take a bit of that production and ingenuity through exposure to it through the companies that drive and profit from it. Capitalism has a good track record and I think its fair to say have been positive on balance, sure there are bad years, but there are more good than bad. Some of the trackers I use are charging 0.06-0.07% per year (on top of platform costs but still!). 

Agreed, I do however prefer actively managed funds, but only if the fund manager shares my view. Fundsmith Equity is my core fund along with Scottish Mortgage for a bit of aggresive stock picking.

If we are talking about odd mistakes, it pains me to recall I sold shares in Asos at 23p, after they tripled in value, they went on to reach £70 at peak (without consolidation). I just never got back in, my kids buy stuff from there, but they are banned from mentioning the company name such is my embarrasment!

Share this post


Link to post
Share on other sites

Active management is entirely different to capturing the market, it is the equivalent of stock picking but you pay someone who says they know more than you, to do it for you. But time is money and so maybe its worth it, otherwise you need to do the research yourself and being human you probably come to the same conclusions as the guy you could have paid 1% a year to and saved yourself a few hours a week.

I feel your pain on Asos don't beat yourself up, how many people are going through the same pain with bitcoin I think its got to be a fair few or us :D I have similar failures in the past too you think I would learn, and I am confident ill make similar mistakes again but hopefully not the same ones, all part of learning. Let your winners run is a good lesson, but so is take your profits so what the hell do you do? :rolleyes:

Share this post


Link to post
Share on other sites

Invest in gold and wait for the next financial crisis, good will jump up further, shares will drop, buy shares when they are cheap. Most indexes are well over valued so I’m out. 

Saving cash and gold to invest at the right time. 

Share this post


Link to post
Share on other sites

Index funds are great over long term.  What you have to bear in mind s the Index components changes over the year, with poorly performing companies dropped and replaced by well performing companies.  Only question is whether its all a bit frothy at the moment and due a correction, i've held off further investment due to this, though maybe missing some years of gain.

Edited by Martlet

Share this post


Link to post
Share on other sites

You probably want something more diverse than just S&P 500. At the moment, a lot of institutional money is in emerging markets. Bridgewater, for example, has a substantial part of their funds in emerging markets, and they have a strong track record. Also, you don't want to be 100% in stocks. Some cash and some gold are a good idea.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now