The 3 Best S&P 500 Index Funds for 2023 | The Motley Fool (2024)

FAQs

The 3 Best S&P 500 Index Funds for 2023 | The Motley Fool? ›

Looking ahead to second-quarter reports, analysts are calling for S&P 500 earnings to fall 6.4% compared to a year ago. Fortunately, analysts are projecting S&P 500 earnings growth will rebound back into positive territory in the second half of 2023.

Looking ahead to second-quarter reports, analysts are calling for S&P 500 earnings to fall 6.4% compared to a year ago. Fortunately, analysts are projecting S&P 500 earnings growth will rebound back into positive territory in the second half of 2023.

How the 4% Rule Works. The 4% rule is easy to follow. In the first year of retirement, you can withdraw up to 4% of your portfolio's value. If you have $1 million saved for retirement, for example, you could spend $40,000 in the first year of retirement following the 4% rule.

S&P 500 3 Year Return (I:SP5003YR)

S&P 500 3 Year Return is at 37.30%, compared to 43.16% last month and 50.15% last year. This is higher than the long term average of 22.95%. The S&P 500 3 Year Return is the investment return received for a 3 year period, excluding dividends, when holding the S&P 500 index.

What is the lifetime average return of the S&P 500? ›

The index acts as a benchmark of the performance of the U.S. stock market overall, dating back to the 1920s. The index has returned a historic annualized average return of around 11.88% since its 1957 inception through the end of 2021.

10% Return for S&P 500 a Real Possibility by End of 2023

Short of a recession — a very real possibility — consensus estimates are for about 5% earnings growth for S&P 500 companies in 2023. That's certainly less than what it was in years past, but still respectable.

Synopsis. Goldman's chief U.S. equity strategist David Kostin said in a note to clients the firm's 2023 earnings per share forecast for the S&P 500 of $224 remains unchanged and assumes a soft landing for the U.S. economy, as the economics team projects only a 25% probability of a recession over the next 12 months.

"In the first half of 2023, the S&P 500 is expected to re-test the lows of 2022, but a pivot from the Federal Reserve could drive an asset recovery later in the year, pushing the S&P 500 to 4,200 by year-end," the investment bank said in a research note.

High-quality bonds and fixed-indexed annuities are often considered the safest investments with the highest returns. However, there are many different types of bond funds and annuities, each with risks and rewards. For example, government bonds are generally more stable than corporate bonds based on past performance.

How do I choose a S&P 500 index fund? ›

Within the world of corporate governance, there has hardly been a more important recent development than the rise of the 'Big Three' asset managers—Vanguard, State Street Global Advisors, and BlackRock.

We do not think now is a good time to invest heavily in the S&P 500 if you have a short- to medium-term horizon. We underweight equities in our broader Asset Allocation framework because inflation is still high, and we do not think the Federal Reserve has finished hiking despite market expectations of cuts in 2023.

If you are looking at index investing, it's better to go with a broader index than select a few stocks in any segment. Therefore, avoid indices like Small Cap 50 and Mid Cap 50. If you compare the small-cap index with the mid-cap index, you will realise why the small-cap should be tactical.

To use the Rule of 72, divide the number 72 by an investment's expected annual return. The result is the number of years it will take, roughly, to double your money.

Buffett's only index funds

The SPDR S&P 500 ETF Trust, or SPY for short, is run by State Street. It was the first exchange-traded fund (ETF) listed in the U.S. SPY currently has roughly $360 billion in assets under management. Its annual expense ratio is 0.0945%.

Absolutely. In fact, they may be your best bet to retire rich.

If you invested $100 in the S&P 500 at the beginning of 1930, you would have about $566,135.36 at the end of 2023, assuming you reinvested all dividends. This is a return on investment of 566,035.36%, or 9.71% per year.

What is the 20 year average of the S&P 500? ›

Stock Market Average Yearly Return for the Last 20 Years

The historical average yearly return of the S&P 500 is 10.05% over the last 20 years, as of the end of April 2023. This assumes dividends are reinvested. Adjusted for inflation, the 20-year average stock market return (including dividends) is 7.335%.

They're a good proxy for stocks overall: An S&P 500 Index fund tends to correlate "more closely to the broader market, so it's better than some other indexes, like the Dow Jones Industrial Average), which only tracks 30 stocks," says Ritter. However, there's no guarantee that it will be successful.

How long has it historically taken a stock investment to double? NYU business professor Aswath Damodaran has done the math. According to his math, since 1949 S&P 500 investments have doubled ten times, or an average of about seven years each time.

Basic Info. S&P 500 10 Year Return is at 156.3%, compared to 161.0% last month and 215.4% last year. This is higher than the long term average of 112.6%.

THE FORECAST

The S&P 500 was at 4,238 as I wrote this on June 11, 2021. Over the next 5 years, relying on decades of portfolio management and technical analysis, my “best guess” is as follows: Between now and June of 2026, the S&P 500 could be as high as 5,000, and as low as 2,000.

Basic Info. S&P 500 2 Year Return is at -0.58%, compared to -0.28% last month and 35.73% last year.

S&P 500 5 Year Return is at 54.51%, compared to 57.45% last month and 71.33% last year. This is higher than the long term average of 44.37%. The S&P 500 5 Year Return is the investment return received for a 5 year period, excluding dividends, when holding the S&P 500 index.

You probably want to hang it up around the age of 70, if not before. That's not only because, by that age, you are aiming to conserve what you've got more than you are aiming to make more, so you're probably moving more money into bonds, or an immediate lifetime annuity.

Longforecast's projections have the S&P rising by another 400 points in 2024, with a volatility reflecting changing economic fundamentals and news. Their findings bode well for the 5 year and 10 year stock market performance.

Will the stock market recover in 2024? ›

One of Wall Street's most vocal bears expects the stock market to fully recover its losses and trade to record highs in 2024. "This is not the end of the world.

The growth profile will show divergence: the Euro area will likely face a mild recession into late 2022/early 2023, while the U.S. is expected to slide into recession in late 2023. In currency markets, further dollar strength is still expected in 2023, but of a lower magnitude and different composition than in 2022.

After a dismal year in 2022 in which the stock market fell about 20%, the broader benchmark S&P 500 has gotten off to a strong start to 2023 and is already up roughly 8.2%. But it's also now crossed over 4,100, which is already above where most Wall Street analysts projected the market to finish by the end of the year.

On average, S&P 500 earnings decline 16.4% in recession.

S&P 500: $100 in 1945 → $384,324.55 in 2023

This lump-sum investment beats inflation during this period for an inflation-adjusted return of about 22,703.84% cumulatively, or 7.19% per year. If you used dollar-cost averaging (monthly) instead of a lump-sum investment, you'd have $311,832.93.

The best performing major asset class in 2023 is the NASDAQ, which is heavily exposed to technology firms. The NASDAQ was particularly hard hit in 2022 for two reasons. First, the index consists of fast-growing companies with long-dated cash flows, which are particularly sensitive to the rate rise of 2022.

2023 is a great time to start investing. But so was 2022. The key point is that over the long term, investments generally do grow in value, even if there is some early volatility. It is far better to invest now, whenever now happens to be, rather than waiting for some ideal future opportunity.

What stock will double in 2023? ›

The best performing Asset Class in the last 30 years is US Technology, that granded a +13.50% annualized return. The worst is US Cash, with a +2.20% annualized return in the last 30 years.

The five most common asset classes are equities, fixed-income securities, cash, marketable commodities and real estate.

Common safe assets include cash, Treasuries, money market funds, and gold. The safest assets are known as risk-free assets, such as sovereign debt instruments issued by governments of developed countries.