The S&P 500 is an index of the 500 largest publicly traded US companies by market capitalization. It represents approximately 80% of the total US stock market value. When people say “the market was up today,” they usually mean the S&P 500 was up.

Historical Performance

Since its 1957 inception, the S&P 500 has averaged approximately 10.5% annual total return (including dividends). With inflation adjusting to ~7.5% real return. $10,000 invested in 1990 โ†’ approximately $240,000 today. The worst 10-year period still produced positive returns. The longest it’s ever taken to recover from a major crash: 13 years (Great Depression โ€” a true anomaly).

How to Invest in the S&P 500

Buy index funds: VOO (Vanguard, 0.03% expense ratio), SPY (State Street, 0.09% expense ratio, most liquid), IVV (iShares, 0.03% expense ratio), FXAIX (Fidelity mutual fund, 0.015% โ€” cheapest available). All track the same index. The tiny expense ratio differences barely matter over 30 years.

Why It Beats Most Active Managers

Over any 15-year period, 92% of active large-cap fund managers underperform the S&P 500 net of fees. The math is simple: active managers charge 0.5โ€“1.5% in fees, trade frequently (additional costs), and can’t consistently pick stocks that beat the index. Passive investing in the S&P 500 is not “settling” โ€” it’s winning by not playing a rigged game.

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Set It and Forget It
Earn: Best long-term strategy
Automate monthly S&P 500 ETF purchases. Enable DRIP. Check performance quarterly at most. Ignore daily market noise. This strategy has outperformed 92% of professional fund managers over 15-year periods.