📍 Can You Outperform the S&P 500? The Truth About Long-Term Investing
The S&P 500 is the benchmark investment. It provides decades of consistent returns. And yeah, it might be a little safe and a little conservative. But for most investors, SPLG/VOO/SPY/FXAIX is a solid foundation for beginners and experienced investors.
⁉️ BUT: Can you outperform it? Historically, the S&P 500 has an average annual return of 10%.
⏰ Most investors will say NO, because while many investments do outperform it on the short term, most don’t have that long term track record that you can set your clock to.
💵 While we can look back in time and say, oh, this ETF or that stock, or this cryptocurrency outperformed the S&P 500, that might just be one moment in time, a period of hysteria, YOLO/FOMO/hype/etc. that drives an asset up like crazy.
BUT DOES IT HAVE THE CONSISTENT RETURNS OVER 30 YEARS?
💃 Most investors arrive to these investments a little late to the dance.
📈 NVDA is ⬆️ 23,000% in the last ten years. I’d say that outperforms the SP500’s ten year return of 176%, but … were you in NVDA 10 years ago?
📊 And if you were, did you somehow manage to hold onto it all those years, or did you get nervous and sell when you were up 100%, missing out on the 22,900% gain that came later? Or maybe you bought in at the end, once the hype was cooling down?
That’s why people opt for the S&P 500 as the foundation, and once they have that, and a consistent investing strategy for a 10-30 year period, they consider other investments.
Here are just a few that have done very well in the last 10 years:
QQQ ⬆️ 364%
SCHG ⬆️ 289%
FTEC ⬆️ 434%
SMH ⬆️ 734%
AAPL ⬆️ 601%
NVDA ⬆️ 23,000%
NFLX ⬆️ 1531%
CMG ⬆️ 280%
AZO ⬆️ 431%
BTC ⬆️ 19,000%
🔥 Those are some massive gainers. But their growth is unpredictable and future results aren’t guaranteed because of past performance, soooo with that being said, you can easily go back in time and find things that outperformed the S&P 500 on a short term basis, but long term? Is it possible? I guess we’ll find out in the future.
