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Passive index funds good bet long term?

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  • 01-12-2017 7:47pm
    #1
    Elessar
    Registered Users Posts: 5,239 ✭✭✭


    I have been considering starting an investment portfolio in the last while and have gone and created an account on Degiro. After doing some research, in the longer term, passive index funds like the S&P500 seem to be the best bet for returns.

    I recently found a calculator (HERE) that calculates what you would have earned over time if you invested in the S&P500. Over a 10 year period from '07 to '17 it looks like one could have effectively doubled their money. Is this accurate?

    I know nothing is guaranteed but if I invested say €15k to start in this fund via Degiro, and added an average of 500 or so a month to it, over 5 years if returns were the same as the previous 5, I could end up with €70k in the pot. Make that 10 years (even through the last recession) and it's nearly €150k. Since that money would just be sitting in my account otherwise, I'm seriously considering this fund.

    Am I way off here? Long term is the S&P500 a decent bet, are there any others I should be looking at? Any advice is appreciated!


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    #2
    topper_harley2
    Registered Users Posts: 537 ✭✭✭topper_harley2


    Did you read the other 200 threads on index funds discussing the exact same thing?

    S&P500 is entirely US equities, what about the rest of the world....

    Past performance is irrelevant in terms of future performance....07-17 is one of the longest bull runs in history, randomly picking a time frame and saying "I could've doubled my money" is meaningless.

    When S&P dropped 50% around early 07, would you have bailed, thereby missing the 07-17 gains?


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    #3
    Squozen
    Registered Users Posts: 117 ✭✭Squozen


    The S&P 500 has outperformed pretty much every index long-term and US companies do business globally.

    To the OP, as long as you’re in this for the long haul (at LEAST 5-7 years, ideally 15-20), you’ll do very well from the S&P 500. But if you’re doing this long-term you’d be much better off putting the money into a pension that uses the same index as you’ll get a 40% return just from the money being pre-tax.


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