Overview
- The latest guidance emphasizes using a broad S&P 500 tracker like Vanguard’s VOO as a core holding, citing its 0.03% expense ratio and near-perfect index correlation.
- Authors urge a fixed monthly investing plan to avoid market-timing errors, noting that new highs are common and rebounds often follow pullbacks.
- Research referenced from J.P. Morgan shows about 40% of individual stocks had negative returns from 1980 to 2020 and only roughly 13% of active funds beat the S&P 500 over the past decade.
- A complementary growth sleeve is highlighted in iShares Core S&P Small-Cap ETF (IJR), which holds 639 U.S. small-cap stocks across sectors and carries higher volatility alongside greater upside potential.
- Citing historical results, the pieces note IJR’s average returns of about 9.49% since 2000 and 12.86% over the past five years, with an illustration that $175 invested monthly could reach roughly $2 million in 40 years if similar returns persist.