Here’s How You Can Double Your Money Without Having Prior Experience In Investing
As an investor, you can have long-term goals and one of them can be to increase your money over time. But to achieve this, you need to build a solid portfolio. And if you are new to the stock market, you may not be sure of your ability to choose the mix of companies that will make your goals achievable.
If so, don’t worry. One simple step on your part can potentially triple your money – even if your stock knowledge is somewhat limited.
INVEST IN DIVERSE MARKET
Why invest in a wide market is important?
The market contains many different sectors and in every industry, many different companies. You can spend a lot of time trying to find that shares a place in your portfolio. But if you don’t have time, there is another solution that can make you very rich – which draws on the market-index funds.
Index funds can easily process funds designed to meet the performance of different reference values that are tied.
Index funds apply to low fees because they do not lend fund managers in stock choosing. However, their strategy is to simply select an index.
There are now a number of index funds in which you can choose to save your money. But if you have big goals and limited knowledge of the stock market, you can choose the S&P 500 index fund.
S&P 500 INDEX FUND
The S&P 500 Index is one of the 500 largest publicly traded companies and is considered a measure of how the stock market works as a whole. With the S&P 500 index fund in your portfolio, you get instant diversification. And you can also enjoy decent returns.
Between 1957 and 2021, the S&P 500 achieved an average annual yield of almost 10.5%. Well, that doesn’t mean the index in this window is back 10.5% a year. Remember the Great Recession? The index did not always do well. But everyone says S&P 500 rewards investors who stay there for years. And if you’re willing to do the same, you can triple your money than you hope.
So let’s say you have $10,000 to invest and decide to put that money in the S&P500 index fund and leave it without adding a dollar. If this index fund provides an average annual return of 10.5%, you can triple your money in 11 years.
Leave this money for 22 years and you will have nine times your initial investment, or $90,000, so you can expect the same return of 10.5%.
S&P 500 Index Funds cannot help your portfolio beat the wide market. But if you like the idea that matches the performance of the wide market, buying the S&P 500 index will be an easy way to create a portfolio in the first place.