1 Why buy S&P
In simple terms, it has high yield, small drawdown and good holding experience. A simple comparison of the yield analysis of the S&P 500 and CSI 300 ETFs in the past 11 years is shown in the figure. The S&P 500 yields about 230%, and the CSI 300 yields about 5.5%, which is 46 times higher (not necessarily accurate).
2 What is S&P
The Standard & Poor’s 500 Index (English: Standard & Poor’s 500), referred to as S&P 500 or S&P 500, the constituent stocks of the S&P 500 Index are selected and regularly replaced by a committee, and the index is adjusted once every quarter (March, June, September and December).
The index includes a series of large American companies such as Apple, Microsoft, Amazon, Tesla, Google, Berkshire Hathaway, United Health, Coca-Cola, Morgan Stanley and Morgan Stanley, which are distributed in various industries. The TOP10 accounts for about 25%, which is relatively dispersed.
Warren Buffett endorsed: “I often recommend low-cost S&P 500 index funds, but only a very few humble friends will believe me.”
In 2006, Buffett proposed a $500,000 bet that the performance of the S&P 500 index fund could beat the performance of any five hedge funds (actively managed funds), and no one dared to take up the challenge. In 2007, Ted Seides, co-manager of the Wall Street hedge fund Protégé Partners, stepped up to respond to the challenge. He chose a series of hedge funds to deal with Buffett’s index fund. In the 10-year bet, Buffett defeated Seides with a big score of 125.8% to 36.3%.
In 2023, Buffett talked about his estate planning again: it is recommended to invest 90% of the estate in the US S&P 500 index fund and 10% in short-term government bonds.
