Invest in the S&P 500
Choosing a safe investment can be daunting when you’re new to investing. Everyone wants to have a share of Apple Computers or Disney, but owning shares in these companies can seem like an unreachable goal for a beginning investor with little investment capital.
Still, there is a way you can own a piece of these blue-chip companies and a lot more. Simply invest in the S&P 500, and you’ll have a safe and solid investment that can serve you well for decades.
The S&P 500 represent roughly 500 or so blue-chip companies that Standard & Poor tracks and invests in. This investment is then sold to smaller investors in smaller units.
To reap the benefits of an investment in the S&P 500, you’ll have to be patient. The safety and security of the investment are due to the proven profitability of the companies you’ll own a piece of. And these companies are profitable partially because of their stability and longevity. They’ve attracted investors because of these qualities, and the investments have allowed them to grow and expand.
Safe Investment in an Index Fund
By investing in the S&P 500, you’re investing in an index fund. An index fund has become one of the most popular ways to invest because you’re able to diversify your funds across a wide variety of industries by simply purchasing a share.
A share in the S&P 500 or most index funds represents tiny slices of the most profitable blue-chip companies in the world that you’ve purchased with a single transaction. The sheer number of the companies represented in a share guarantee the safety of the investment. Even if one of these companies has a catastrophic year and goes bankrupt, the other hundreds of other companies that remain profitable offset the loss.
By selecting the companies that make up the index fund across so many sectors and industries, S&P further guarantees the safety of the investment.
Passive Investment
One of the reasons why the S&P 500 index fund is such a good investment for a beginner is because of its passive nature. Your investment doesn’t have to be constantly monitored and adjusted to deliver returns. Beginning investors are urged to use a simple buy-and-hold strategy to ensure they see a return on their investment.
By being patient and taking a hands-off approach to your S&P 500 investment, you allow the power of compound interest to work its magic.
However, a hands-off approach doesn’t mean ignoring your investment entirely. By investing in the S&P 500, you now have access to a compound interest mechanism backed by some of the world’s most profitable companies. You should continue to add to your investment as often as you can to reap all the benefits of compound interest.
Learn more about the benefits of investing in the S&P 500 by getting in touch with Investors Assurance SPC. We offer 10, 15, and 20-year regular contribution plans to the S&P 500 that provide safe and secure investments.
