I'm trying to get into investing after being terrible with money for the start of my adult life. I'm 30 now and realize the need for serious planning. I have read The Little Book of Common Sense Investing by John Bogle which seems to summarize down to, leave your money in an S&P500 fund, keep paying into it until you are ready to retire, take profits out only at retirement. The data presented in the book was quite compelling which had me thinking if an S&P500 ETF was the optimal choice in long term investing.
I started looking into historical returns, going back from the early 50s to the end of 2019 before the pandemic started. What I found out from these 70 years of returns was that although the S&P500 is an incredible investment long term, investing specifically in US Small Cap stocks would yield over double the returns over the same time period.
Someone please tell me if I'm incorrect because I'm still new to all this, but assuming that is correct, would it not be ideal to focus on small cap US stocks? Obviously the big drawback is the increased volatility of small caps (S&P500 has been winning out in the recent short-term), but with a longer time horizon I feel like this is the way to go to optimize returns.
What are your thoughts?
Submitted January 26, 2022 at 03:16AM by ThePeoplesResistance https://ift.tt/3nYrVCl
