The Best S&P 500 ETF to Invest $1,000 in Right Now
Investing $1,000 in any investment is a significant commitment with the obvious goal of maximizing your returns and minimizing your losses stock exchange (ETF) that allows you to buy stocks like you would stocks, and they can be bought for small amounts.
If you have $1,000 to invest right now, there are several good reasons the money should go into an ETF that tracks S&P 500:. Here’s why and which S&P 500 ETF is one of the best.
Billionaire investor and CEO Berkshire Hathaway Warren Buffett has just two S&P 500 ETFs in his firm’s $325 billion investment portfolio, with the largest Vanguard S&P 500 ETF (NYSEMKT: FLIGHT). Buffett’s firm currently owns 43,000 shares of the Vanguard S&P 500 ETF, which is admittedly a small position compared to his other holdings, but he has made clear his endorsement of funds that track the S&P 500.
“In my opinion, the best thing for most people is to own the S&P 500 index fund,” Buffett said at the 2020 Berkshire Hathaway annual meeting.
Buffett also said at Berkshire’s 2013 annual meeting that almost all of the investment assets he will leave to his wife will be in an index fund when she dies. “My advice to the trustee could not be clearer. invest 90% of the money in a very cheap S&P 500 index fund (I suggest Vanguard’s).
Index funds have become a popular investment vehicle because they’re hard to beat. The Vanguard S&P 500 ETF is passively managed, meaning the money invested in the fund is used to buy shares of companies in the S&P 500 index without trying to focus on picking specific winners.
Not only is this easier than trying to figure out which stock will beat the market, this strategy usually yields better returns Morningstar shows that only 29% of actively managed funds beat passively indexed peers over the past decade.
if the fund is “passively managed,” you might think you won’t be able to make significant gains, but that’s not true. The Vanguard S&P 500 ETF has had a total return of 257% over the past decade.
Another huge advantage of this particular ETF is that it is very low cost-ratio fee only 0.03% That means if you invest $1000 you will pay only $0.30 in fees and $10,000 invested in the fund will cost you only $3.
The S&P 500 has had a historical average return of 10.1% per year since 1957. Of course, some years will be higher and some years lower. Also, those returns do not take into account inflation.
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