VOO: Why Buying Over $400 Is Still A Good Idea For Long-Term Investors

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VOO: Why Buying Over $400 Is Still A Good Idea For Long-Term Investors

seekingalpha2023-06-20

SummaryThe S&P 500 and index funds tracking it are up over 20%, with some analysts predicting further growth and others expecting a retracement.Investing in an S&P 500 index fund, such as VOO, can be ...

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Ved86
·2023-06-20
If you're a non-US resident like me, CSPX may be a better alternative with the lower 15% WHT versus the traditional 30%. S27 is the best option for Singaporeans trying to invest through their SRS account. You may consider subscribing auto-invest for the Big 7 or any individual constituents to increase your growth (and risk) potential ratio.
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- PhoenixBee:
  Can buy cspx using tiger broker? What's S27?
  2023-08-07
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- Yx tan:
  Ok
  2023-06-20
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- Runderk:
  Nice one
  2023-06-20
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Over the past year, the Vanguard S&P 500 ETF (NYSEARCA:VOO) has appreciated by 20.23% and is $3.51 off its 52-week highs. Some analysts call for a retracement, while others are sounding the alarm. BMO Capital Markets have raised their S&P 500 price target to 4,550 by year-end, and Goldman Sachs (GS) strategist David Kostin also increased his target from 4,000 to 4,500, while Mike Wilson from Morgan Stanley (MS) remains bearish with a 3,900 target, and UBS is still looking for a hard landing and an economic contraction of -1% in real GDP with an impact on the labor market. The fact is that not a single person, including myself, has a crystal ball and predict the future. If it were easy to predict what the market and individual stocks were going to do time and time again, many people would retire before the age of 30.Individuals can drive themselves crazy trying to time the markets, and by doing so put themselves in a position to miss opportunities. Everyone who invests in the market allocates personal financial resources toward investments with the end goal of generating a profit. Most people don't outline their long-term goals and formulate a plan to get there before investing. Not everyone is going to catch Tesla (TSLA) or Apple (AAPL) at the bottom, and even when a good decision is made, and a stock becomes a multi-bagger, it's even harder to sell and book the profit. For most people investing in a simple index fund such as VOO is a stress-free way to grow personal wealth as you invest in the 500 largest companies in America. Personally, I am buying shares of an S&P 500 index fund every 2 weeks, regardless if the market goes up or down, as the long-term benefits of time in the market are immense.Seeking AlphaIf you're investing in VOO, you're probably not a day-trader, so take the long-term approach and continue investing no matter if the market is in a technical bull or bear marketSince 1928 the S&P 500 has appreciated from 308.88 to its current level of 4,409.59. Over this period, there have been 15 recessions, with the period between 1929 and 1933 falling into a depression. After 95 years, the stock market has seen bubbles, systematic banking failures, declining government spending, countless conflicts and wars, trade wars, oil crises, a subprime mortgage crisis, bubbles, periods of sky-high inflation, and a pandemic. No matter what occurred or how uncertain the immediate future looked, the economy and the market have always bounced back and eventually risen. This is why the chart below has ultimately gone up to the right. Executing decisions of buying and selling at opportunistic times is easier said than done, and very few people can accomplish it.S&P 500 index – 96-year historical chartMacrotrendsOver the past 96 years, the market has finished in the red 30 times while finishing positive 65 times, assuming it finishes positive in 2023. This works out to a 31.25% chance of seeing a negative year in the market. There has only been 1 occasion since 1928 (1929-1932) where the market declined for 4 consecutive years. There have been 2 periods (1939-1941) (2000-2002) where the market declined for 3 consecutive years, and only 1 occurrence (1973-1974) where the market declined for 2 consecutive years.While access to information has become readily available to everyone, it's also become a negative factor in some regards. For those of you reading this article that has been investing in the markets for a decade or longer, do you remember this much focus being on Fed meetings or different economic data points? While this is mainly due to having more outlets covering these events, and more analysis, in the end, it's all short-term metrics. If you're a long-term investor, you should be rejoicing when the market pulls back because you can invest more capital at better prices. Unless something occurs that changes the long-term outlook for American business, these data points from the Fed, unemployment, or the commodity markets are just impacting the near future.S&P 500 Historical Annual ReturnsMacrotrendsMany places such as Investopedia use 1957 as the starting point when looking at the S&P as this is when Standard and Poor's officially launched the S&P 500 index. Going back to 1957, the S&P 500 index has an average annual return of 8.37%, and if you go back to 1928 and calculate for all of the years that include the largest downturn in the market, the average annual return over the past 96 years has been 7.77%.I do believe not enough people think about retirement early enough, or outline a systematic plan to achieve their long-term goals no matter how simplistic or complex the plan is. Investing in an index fund could be the simplest way without driving yourself crazy or spending an immense amount of time researching different investments to create wealth. From the age of 25 to 65, a 40-year period, if you were to save and invest $500 per month and generate a 7.77% average annual rate of return, you would have $1,514,627.66. Your contributions would total $240,000, and 84.15% of the ending balance would have been accumulated through market appreciation. If I use the 8.37% average return rate since 1957, the ending balance would be $1,778,730.76, and if you were able to save $1,000 per month over 40 years at an 8.37% rate of return, your ending balance would be $3,557,461.52.Trying to time the market and only buy the dips isn't a great idea for most people. By selecting VOO as an investment vehicle for the S&P 500 and investing systematically every month, you will buy on the way up and down, but the time in the market will be your most significant ally.calculator.net/Why I prefer VOO compared to other S&P 500 index funds, and while I am still buying the S&P on the way upMy opinion is that as long as you're investing, you're well ahead of the game, but if you have the ability to choose, I prefer VOO to other S&P 500 ETFs. There are other investment vehicles, such as total market and target date funds, that have done well, but I prefer the S&P 500 index. The S&P 500 is comprised of the 500 largest U.S. publicly traded companies, with a primary emphasis on market capitalization. To be eligible for the S&P 500 index, a company needs to be U.S. based, have a market cap of at least $12.7 billion, have a public float of at least 10% of its shares outstanding, and must be GAAP profitable in its most recent quarter and the sum of the trailing twelve months (TTM) must be profitable.Steven Fiorillo, Seeking AlphaVOO and the SPDR S&P 500 ETF Trust (SPY) are arguably the 2 most well-known S&P 500 ETFs. While both funds will mimic the S&P 500 I prefer VOO for the simple reason of being cheap. I am invested in several funds from both Vanguard and State Street, but the determining factor of why I invested in VOO over SPY was the expense ratio and the dividend. When I am allocating capital and entrusting it to a financial institution to manage, I want the best return on my capital for the lowest amount of fees. VOO has an expense ratio of 0.03% which means for every $100,000 invested you're paying $30 in management fees vs. $90 for SPY. This may not sound like a lot, but if you're looking at the cost over a 40-year period, especially in the ladder years, that could be upward of over $10,000 of unnecessary fees that could have been capital appreciating in your account, depending on how much you're investing and for how long. The other reason is that the yield on VOO is slightly higher, and while 02% isn't much, it's something, and when compounded with the savings on management fees, it's just extra money in my pocket rather than someone else's.If you follow the markets, we are living through a tech-fueled rally. Some have made the case that the market is overvalued because the \"big 7\" accounts for almost all the S&P's gains in 2023. I don't subscribe to this because that's like saying the Chicago Bulls wouldn't have won 6 championships without Michael Jordan. Apple (AAPL), Microsoft (MSFT), Alphabet (GOOGL), Amazon (AMZN), Meta Platforms (META), Tesla (TSLA), and Nvidia (NVDA) are part of the S&P 500, they're not going anywhere, and to look at the market without them in it is a ridiculous idea.Looking at the S&P 500 earnings compared to the index price over the past 96 years, there is a distinct correlation between the two. At some periods, earnings which is the yellow line as outrun the historical price, but have always come back in line. Currently, the earnings-to-price correlation looks to be in sync. The next chart is a historical P/E average of the S&P, and as of May 2023, the S&P was trading at a P/E of 23.71. We're not trading anywhere near the 40 level on a P/E basis, and over time the market has continued to expand, and companies have generated larger amounts of profits.S&P 500 Earnings - 96 Year Historical ChartMacrotrendsS&P 500 PE Ratio - 96 Year Historical ChartMacrotrendsSince the market is being led by 7 stocks, I looked at their forward EPS projections and created a table below. AAPL, MSFT, GOOGL, AMZN, META, TSLA, and NVDA are all projected to grow their earnings considerably thru 2025, with double-digit YoY growth coming in almost every year for each company. Some may feel the market is overvalued, and I am not saying that the market can't retrace, but it's going to be hard to fight a bull market in 2024 when the Fed eventually starts cutting rates, and earnings are growing.Steven Fiorillo, Seeking AlphaConclusionVOO is my favorite S&P 500 ETF because a fantastic institution runs it, has an extremely low expense ratio, and generates slightly more yield than SPY. The historical data shows that time in the market outweighs short-term headlines and economic events. Maybe the market retraces a bit before its next leg up, and maybe we go into a recession which I don't think we will, but ultimately continuously investing in VOO has been a winning approach rather than trying to time the market. Sure, VOO has appreciated just over 20% in the past year, but most people investing in VOO are not looking at things from a short-term perspective. I feel it's better to get your money in when you can and benefit from the quarterly dividends and overall appreciation because timing the market is difficult, and few people can do it effectively. I continue to buy the S&P every 2-weeks as I am bullish on American business from a long-term perspective. VOO is a great vehicle to create long-term gains and increase personal wealth. Just keep buying, and your price per share will average itself out over time, and based on historical data, the returns should be favorable.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":757384424931504,"gmtCreate":1687233519958,"gmtModify":1687233524355,"author":{"id":"4148219071706762","authorId":"4148219071706762","name":"Ved86","avatar":"https://community-static.tradeup.com/news/487cfec4b9d18a6a890a8bd1206520b9","vip":1,"crmLevel":1,"crmLevelSwitch":0,"idStr":"4148219071706762","authorIdStr":"4148219071706762"},"htmlText":"If you're a non-US resident like me, CSPX may be a better alternative with the lower 15% WHT versus the traditional 30%. S27 is the best option for Singaporeans trying to invest through their SRS account.&nbsp; You may consider subscribing auto-invest for the Big 7 or any individual constituents to increase your growth (and risk) potential ratio.","listText":"If you're a non-US resident like me, CSPX may be a better alternative with the lower 15% WHT versus the traditional 30%. S27 is the best option for Singaporeans trying to invest through their SRS account.&nbsp; You may consider subscribing auto-invest for the Big 7 or any individual constituents to increase your growth (and risk) potential ratio.","text":"If you're a non-US resident like me, CSPX may be a better alternative with the lower 15% WHT versus the traditional 30%. S27 is the best option for Singaporeans trying to invest through their SRS account. You may consider subscribing auto-invest for the Big 7 or any individual constituents to increase your growth (and risk) potential ratio.","images":[],"top":1,"highlighted":2,"essential":1,"paper":1,"likeSize":15,"commentSize":11,"repostSize":0,"link":"https://ttm.financial/post/757384424931504","repostId":2344441599,"repostType":2,"repost":{"id":"2344441599","kind":"highlight","pubTimestamp":1687223700,"share":"https://ttm.financial/m/news/2344441599?lang=&edition=fundamental","pubTime":"2023-06-20 09:15","market":"us","language":"en","title":"VOO: Why Buying Over $400 Is Still A Good Idea For Long-Term Investors","url":"https://stock-news.laohu8.com/highlight/detail?id=2344441599","media":"seekingalpha","summary":"Sakorn SukkasemsakornThe market is technically in a bull market as the S&P 500 and the index funds that track it are up over 20%. Over the past year, the Vanguard S&P 500 ETF (NYSEARCA:VOO) has apprec","content":"<html><head></head><body><h2 style=\"text-align: left;\">Summary</h2><ul><li><p>The S&amp;P 500 and index funds tracking it are up over 20%, with some analysts predicting further growth and others expecting a retracement.</p></li><li><p>Investing in an S&amp;P 500 index fund, such as VOO, can be a stress-free way to grow personal wealth by investing in the 500 largest US companies.</p></li><li><p>Historical data shows that time in the market outweighs short-term headlines and economic events, making continuous investment in VOO a winning approach.</p></li></ul><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/fc3e26c46d852b3a91ce90bb35d19f27\" alt=\"Sakorn Sukkasemsakorn\" title=\"Sakorn Sukkasemsakorn\" tg-width=\"750\" tg-height=\"484\"/><span>Sakorn Sukkasemsakorn</span></p><p>The market is technically in a bull market as the S&amp;P 500 and the index funds that track it are up over 20%. Over the past year, the Vanguard S&amp;P 500 ETF (NYSEARCA:VOO) has appreciated by 20.23% and is $3.51 off its 52-week highs. Some analysts call for a retracement, while others are sounding the alarm. BMO Capital Markets have raised their S&amp;P 500 price target to 4,550 by year-end, and Goldman Sachs (GS) strategist David Kostin also increased his target from 4,000 to 4,500, while Mike Wilson from Morgan Stanley (MS) remains bearish with a 3,900 target, and UBS is still looking for a hard landing and an economic contraction of -1% in real GDP with an impact on the labor market. The fact is that not a single person, including myself, has a crystal ball and predict the future. If it were easy to predict what the market and individual stocks were going to do time and time again, many people would retire before the age of 30.</p><p>Individuals can drive themselves crazy trying to time the markets, and by doing so put themselves in a position to miss opportunities. Everyone who invests in the market allocates personal financial resources toward investments with the end goal of generating a profit. Most people don&#39;t outline their long-term goals and formulate a plan to get there before investing. Not everyone is going to catch Tesla (TSLA) or Apple (AAPL) at the bottom, and even when a good decision is made, and a stock becomes a multi-bagger, it&#39;s even harder to sell and book the profit. For most people investing in a simple index fund such as VOO is a stress-free way to grow personal wealth as you invest in the 500 largest companies in America. Personally, I am buying shares of an S&amp;P 500 index fund every 2 weeks, regardless if the market goes up or down, as the long-term benefits of time in the market are immense.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/7f31093e758293813847008ccb5523bd\" alt=\"Seeking Alpha\" title=\"Seeking Alpha\" tg-width=\"640\" tg-height=\"225\"/><span>Seeking Alpha</span></p><h2>If you&#39;re investing in VOO, you&#39;re probably not a day-trader, so take the long-term approach and continue investing no matter if the market is in a technical bull or bear market</h2><p>Since 1928 the S&amp;P 500 has appreciated from 308.88 to its current level of 4,409.59. Over this period, there have been 15 recessions, with the period between 1929 and 1933 falling into a depression. After 95 years, the stock market has seen bubbles, systematic banking failures, declining government spending, countless conflicts and wars, trade wars, oil crises, a subprime mortgage crisis, bubbles, periods of sky-high inflation, and a pandemic. No matter what occurred or how uncertain the immediate future looked, the economy and the market have always bounced back and eventually risen. This is why the chart below has ultimately gone up to the right. Executing decisions of buying and selling at opportunistic times is easier said than done, and very few people can accomplish it.</p><h2>S&amp;P 500 index – 96-year historical chart</h2><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/3b922c4dabe986a5bfc92f45426a192d\" alt=\"Macrotrends\" title=\"Macrotrends\" tg-width=\"640\" tg-height=\"404\"/><span>Macrotrends</span></p><p>Over the past 96 years, the market has finished in the red 30 times while finishing positive 65 times, assuming it finishes positive in 2023. This works out to a 31.25% chance of seeing a negative year in the market. There has only been 1 occasion since 1928 (1929-1932) where the market declined for 4 consecutive years. There have been 2 periods (1939-1941) (2000-2002) where the market declined for 3 consecutive years, and only 1 occurrence (1973-1974) where the market declined for 2 consecutive years.</p><p>While access to information has become readily available to everyone, it&#39;s also become a negative factor in some regards. For those of you reading this article that has been investing in the markets for a decade or longer, do you remember this much focus being on Fed meetings or different economic data points? While this is mainly due to having more outlets covering these events, and more analysis, in the end, it&#39;s all short-term metrics. If you&#39;re a long-term investor, you should be rejoicing when the market pulls back because you can invest more capital at better prices. Unless something occurs that changes the long-term outlook for American business, these data points from the Fed, unemployment, or the commodity markets are just impacting the near future.</p><p><strong>S&amp;P 500 Historical Annual Returns</strong></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/819770f7129dca38af922f931076a911\" alt=\"Macrotrends\" title=\"Macrotrends\" tg-width=\"640\" tg-height=\"404\"/><span>Macrotrends</span></p><p>Many places such as Investopedia use 1957 as the starting point when looking at the S&amp;P as this is when Standard and Poor&#39;s officially launched the S&amp;P 500 index. Going back to 1957, the S&amp;P 500 index has an average annual return of 8.37%, and if you go back to 1928 and calculate for all of the years that include the largest downturn in the market, the average annual return over the past 96 years has been 7.77%.</p><p>I do believe not enough people think about retirement early enough, or outline a systematic plan to achieve their long-term goals no matter how simplistic or complex the plan is. Investing in an index fund could be the simplest way without driving yourself crazy or spending an immense amount of time researching different investments to create wealth. From the age of 25 to 65, a 40-year period, if you were to save and invest $500 per month and generate a 7.77% average annual rate of return, you would have $1,514,627.66. Your contributions would total $240,000, and 84.15% of the ending balance would have been accumulated through market appreciation. If I use the 8.37% average return rate since 1957, the ending balance would be $1,778,730.76, and if you were able to save $1,000 per month over 40 years at an 8.37% rate of return, your ending balance would be $3,557,461.52.</p><p>Trying to time the market and only buy the dips isn&#39;t a great idea for most people. By selecting VOO as an investment vehicle for the S&amp;P 500 and investing systematically every month, you will buy on the way up and down, but the time in the market will be your most significant ally.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/46432236e260d145d15c3c2164b327fc\" alt=\"calculator.net/\" title=\"calculator.net/\" tg-width=\"640\" tg-height=\"551\"/><span>calculator.net/</span></p><h2>Why I prefer VOO compared to other S&amp;P 500 index funds, and while I am still buying the S&amp;P on the way up</h2><p>My opinion is that as long as you&#39;re investing, you&#39;re well ahead of the game, but if you have the ability to choose, I prefer VOO to other S&amp;P 500 ETFs. There are other investment vehicles, such as total market and target date funds, that have done well, but I prefer the S&amp;P 500 index. The S&amp;P 500 is comprised of the 500 largest U.S. publicly traded companies, with a primary emphasis on market capitalization. To be eligible for the S&amp;P 500 index, a company needs to be U.S. based, have a market cap of at least $12.7 billion, have a public float of at least 10% of its shares outstanding, and must be GAAP profitable in its most recent quarter and the sum of the trailing twelve months (TTM) must be profitable.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/cb5ec51e3da17ff02c606cbd2bd86bf7\" alt=\"Steven Fiorillo, Seeking Alpha\" title=\"Steven Fiorillo, Seeking Alpha\" tg-width=\"611\" tg-height=\"129\"/><span>Steven Fiorillo, Seeking Alpha</span></p><p>VOO and the SPDR S&amp;P 500 ETF Trust (SPY) are arguably the 2 most well-known S&amp;P 500 ETFs. While both funds will mimic the S&amp;P 500 I prefer VOO for the simple reason of being cheap. I am invested in several funds from both Vanguard and State Street, but the determining factor of why I invested in VOO over SPY was the expense ratio and the dividend. When I am allocating capital and entrusting it to a financial institution to manage, I want the best return on my capital for the lowest amount of fees. VOO has an expense ratio of 0.03% which means for every $100,000 invested you&#39;re paying $30 in management fees vs. $90 for SPY. This may not sound like a lot, but if you&#39;re looking at the cost over a 40-year period, especially in the ladder years, that could be upward of over $10,000 of unnecessary fees that could have been capital appreciating in your account, depending on how much you&#39;re investing and for how long. The other reason is that the yield on VOO is slightly higher, and while 02% isn&#39;t much, it&#39;s something, and when compounded with the savings on management fees, it&#39;s just extra money in my pocket rather than someone else&#39;s.</p><p>If you follow the markets, we are living through a tech-fueled rally. Some have made the case that the market is overvalued because the &#34;big 7&#34; accounts for almost all the S&amp;P&#39;s gains in 2023. I don&#39;t subscribe to this because that&#39;s like saying the Chicago Bulls wouldn&#39;t have won 6 championships without Michael Jordan. Apple (AAPL), Microsoft (MSFT), Alphabet (GOOGL), Amazon (AMZN), <a href=\"https://laohu8.com/S/META\">Meta Platforms</a> (META), Tesla (TSLA), and Nvidia (NVDA) are part of the S&amp;P 500, they&#39;re not going anywhere, and to look at the market without them in it is a ridiculous idea.</p><p>Looking at the S&amp;P 500 earnings compared to the index price over the past 96 years, there is a distinct correlation between the two. At some periods, earnings which is the yellow line as outrun the historical price, but have always come back in line. Currently, the earnings-to-price correlation looks to be in sync. The next chart is a historical P/E average of the S&amp;P, and as of May 2023, the S&amp;P was trading at a P/E of 23.71. We&#39;re not trading anywhere near the 40 level on a P/E basis, and over time the market has continued to expand, and companies have generated larger amounts of profits.</p><p><strong>S&amp;P 500 Earnings - 96 Year Historical Chart</strong></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/304714ab7c6d668a2276ecbed57eaad9\" alt=\"Macrotrends\" title=\"Macrotrends\" tg-width=\"640\" tg-height=\"404\"/><span>Macrotrends</span></p><p><strong>S&amp;P 500 PE Ratio - 96 Year Historical Chart</strong></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/6a7c2f67f2661e888e557d77d6750d9a\" alt=\"Macrotrends\" title=\"Macrotrends\" tg-width=\"640\" tg-height=\"404\"/><span>Macrotrends</span></p><p>Since the market is being led by 7 stocks, I looked at their forward EPS projections and created a table below. AAPL, MSFT, GOOGL, AMZN, META, TSLA, and NVDA are all projected to grow their earnings considerably thru 2025, with double-digit YoY growth coming in almost every year for each company. Some may feel the market is overvalued, and I am not saying that the market can&#39;t retrace, but it&#39;s going to be hard to fight a bull market in 2024 when the Fed eventually starts cutting rates, and earnings are growing.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/10ec03568a338c733f8a9314cafc2c75\" alt=\"Steven Fiorillo, Seeking Alpha\" title=\"Steven Fiorillo, Seeking Alpha\" tg-width=\"560\" tg-height=\"421\"/><span>Steven Fiorillo, Seeking Alpha</span></p><h2>Conclusion</h2><p>VOO is my favorite S&amp;P 500 ETF because a fantastic institution runs it, has an extremely low expense ratio, and generates slightly more yield than SPY. The historical data shows that time in the market outweighs short-term headlines and economic events. Maybe the market retraces a bit before its next leg up, and maybe we go into a recession which I don&#39;t think we will, but ultimately continuously investing in VOO has been a winning approach rather than trying to time the market. Sure, VOO has appreciated just over 20% in the past year, but most people investing in VOO are not looking at things from a short-term perspective. I feel it&#39;s better to get your money in when you can and benefit from the quarterly dividends and overall appreciation because timing the market is difficult, and few people can do it effectively. I continue to buy the S&amp;P every 2-weeks as I am bullish on American business from a long-term perspective. VOO is a great vehicle to create long-term gains and increase personal wealth. Just keep buying, and your price per share will average itself out over time, and based on historical data, the returns should be favorable.</p></body></html>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>VOO: Why Buying Over $400 Is Still A Good Idea For Long-Term Investors</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nVOO: Why Buying Over $400 Is Still A Good Idea For Long-Term Investors\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-06-20 09:15 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4612267-voo-buying-over-400-still-good-idea-for-long-term-investors><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryThe S&P 500 and index funds tracking it are up over 20%, with some analysts predicting further growth and others expecting a retracement.Investing in an S&P 500 index fund, such as VOO, can be ...</p>\n\n<a href=\"https://seekingalpha.com/article/4612267-voo-buying-over-400-still-good-idea-for-long-term-investors\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"IE00BWXC8680.SGD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A5\" (SGD) ACC","BK4543":"AI","BK4559":"巴菲特持仓","LU0130102774.USD":"Natixis Harris Associates US Equity RA USD","LU1861215975.USD":"贝莱德新一代科技基金 A2","LU0276348264.USD":"THREADNEEDLE (LUX) GLOBAL DYNAMIC REAL RETURN\"AUP\" (USD) INC","LU0289961442.SGD":"SUSTAINABLE GLOBAL THEMATIC PORTFOLIO \"AX\" (SGD) ACC","LU0444971666.USD":"天利全球科技基金","LU0011850046.USD":"贝莱德全球长线股票 A2 USD","BK4551":"寇图资本持仓","LU0316494557.USD":"FRANKLIN GLOBAL FUNDAMENTAL STRATEGIES \"A\" ACC","LU0211327993.USD":"TEMPLETON GLOBAL EQUITY INCOME \"A\" (USD) ACC","LU0985489474.SGD":"First Eagle Amundi International AHS-C SGD-H","BK4573":"虚拟现实","BK4097":"系统软件","LU1668664300.SGD":"Blackrock World Financials A2 SGD-H","IE00BJTD4N35.SGD":"Neuberger Berman US Long Short Equity A1  Acc SGD-H","BK4504":"桥水持仓","LU0289941410.SGD":"AB FCP I Dynamic Diversified AX SGD","LU0029864427.USD":"TEMPLETON GLOBAL \"A\" (USD) INC","LU0348723411.USD":"ALLIANZ GLOBAL HI-TECH GROWTH \"A\" (USD) INC","VOO":"Vanguard标普500ETF","LU1316542783.SGD":"Janus Henderson Horizon Global Technology Leaders A2 SGD","LU0557290698.USD":"施罗德环球可持续增长基金","LU0211331839.USD":"FRANKLIN MUTUAL GLB DISCOVERY \"A\" (USD) ACC","BK4548":"巴美列捷福持仓","IE00B3S45H60.SGD":"Neuberger Berman US Multicap Opportunities A Acc SGD-H","BK4529":"IDC概念","LU0456855351.SGD":"JPMorgan Funds - Global Equity A (acc) SGD","LU0417517546.SGD":"Allianz US Equity Cl AT Acc SGD","LU1861559042.SGD":"日兴方舟颠覆性创新基金B SGD","LU0642271901.SGD":"Janus Henderson Horizon Global Technology Leaders A2 SGD-H",".SPX":"S&P 500 Index","LU0889565833.HKD":"FRANKLIN TECHNOLOGY \"A\" (HKD) ACC","LU1623119135.USD":"Natixis Mirova Global Sustainable Equity R-NPF/A USD","IE00B1XK9C88.USD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A\" (USD) ACC","LU1162221912.USD":"FRANKLIN INCOME \"A\" (USD) ACC","LU0061474960.USD":"天利环球焦点基金AU Acc","LU0175139822.USD":"AB FCP I Global Equity Blend A USD","LU1712237335.SGD":"Natixis Mirova Global Sustainable Equity H-R-NPF/A SGD","BK4507":"流媒体概念","IE00BBT3K403.USD":"LEGG MASON CLEARBRIDGE TACTICAL DIVIDEND INCOME \"A(USD) ACC","LU0234572021.USD":"高盛美国核心股票组合Acc","LU0109392836.USD":"富兰克林科技股A","LU0171293334.USD":"贝莱德英国基金A2","BK4211":"区域性银行","BK4524":"宅经济概念","LU1489326972.SGD":"First Eagle Amundi International AHS-MD SGD-H"},"source_url":"https://seekingalpha.com/article/4612267-voo-buying-over-400-still-good-idea-for-long-term-investors","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2344441599","content_text":"SummaryThe S&P 500 and index funds tracking it are up over 20%, with some analysts predicting further growth and others expecting a retracement.Investing in an S&P 500 index fund, such as VOO, can be a stress-free way to grow personal wealth by investing in the 500 largest US companies.Historical data shows that time in the market outweighs short-term headlines and economic events, making continuous investment in VOO a winning approach.Sakorn SukkasemsakornThe market is technically in a bull market as the S&P 500 and the index funds that track it are up over 20%. Over the past year, the Vanguard S&P 500 ETF (NYSEARCA:VOO) has appreciated by 20.23% and is $3.51 off its 52-week highs. Some analysts call for a retracement, while others are sounding the alarm. BMO Capital Markets have raised their S&P 500 price target to 4,550 by year-end, and Goldman Sachs (GS) strategist David Kostin also increased his target from 4,000 to 4,500, while Mike Wilson from Morgan Stanley (MS) remains bearish with a 3,900 target, and UBS is still looking for a hard landing and an economic contraction of -1% in real GDP with an impact on the labor market. The fact is that not a single person, including myself, has a crystal ball and predict the future. If it were easy to predict what the market and individual stocks were going to do time and time again, many people would retire before the age of 30.Individuals can drive themselves crazy trying to time the markets, and by doing so put themselves in a position to miss opportunities. Everyone who invests in the market allocates personal financial resources toward investments with the end goal of generating a profit. Most people don't outline their long-term goals and formulate a plan to get there before investing. Not everyone is going to catch Tesla (TSLA) or Apple (AAPL) at the bottom, and even when a good decision is made, and a stock becomes a multi-bagger, it's even harder to sell and book the profit. For most people investing in a simple index fund such as VOO is a stress-free way to grow personal wealth as you invest in the 500 largest companies in America. Personally, I am buying shares of an S&P 500 index fund every 2 weeks, regardless if the market goes up or down, as the long-term benefits of time in the market are immense.Seeking AlphaIf you're investing in VOO, you're probably not a day-trader, so take the long-term approach and continue investing no matter if the market is in a technical bull or bear marketSince 1928 the S&P 500 has appreciated from 308.88 to its current level of 4,409.59. Over this period, there have been 15 recessions, with the period between 1929 and 1933 falling into a depression. After 95 years, the stock market has seen bubbles, systematic banking failures, declining government spending, countless conflicts and wars, trade wars, oil crises, a subprime mortgage crisis, bubbles, periods of sky-high inflation, and a pandemic. No matter what occurred or how uncertain the immediate future looked, the economy and the market have always bounced back and eventually risen. This is why the chart below has ultimately gone up to the right. Executing decisions of buying and selling at opportunistic times is easier said than done, and very few people can accomplish it.S&P 500 index – 96-year historical chartMacrotrendsOver the past 96 years, the market has finished in the red 30 times while finishing positive 65 times, assuming it finishes positive in 2023. This works out to a 31.25% chance of seeing a negative year in the market. There has only been 1 occasion since 1928 (1929-1932) where the market declined for 4 consecutive years. There have been 2 periods (1939-1941) (2000-2002) where the market declined for 3 consecutive years, and only 1 occurrence (1973-1974) where the market declined for 2 consecutive years.While access to information has become readily available to everyone, it's also become a negative factor in some regards. For those of you reading this article that has been investing in the markets for a decade or longer, do you remember this much focus being on Fed meetings or different economic data points? While this is mainly due to having more outlets covering these events, and more analysis, in the end, it's all short-term metrics. If you're a long-term investor, you should be rejoicing when the market pulls back because you can invest more capital at better prices. Unless something occurs that changes the long-term outlook for American business, these data points from the Fed, unemployment, or the commodity markets are just impacting the near future.S&P 500 Historical Annual ReturnsMacrotrendsMany places such as Investopedia use 1957 as the starting point when looking at the S&P as this is when Standard and Poor's officially launched the S&P 500 index. Going back to 1957, the S&P 500 index has an average annual return of 8.37%, and if you go back to 1928 and calculate for all of the years that include the largest downturn in the market, the average annual return over the past 96 years has been 7.77%.I do believe not enough people think about retirement early enough, or outline a systematic plan to achieve their long-term goals no matter how simplistic or complex the plan is. Investing in an index fund could be the simplest way without driving yourself crazy or spending an immense amount of time researching different investments to create wealth. From the age of 25 to 65, a 40-year period, if you were to save and invest $500 per month and generate a 7.77% average annual rate of return, you would have $1,514,627.66. Your contributions would total $240,000, and 84.15% of the ending balance would have been accumulated through market appreciation. If I use the 8.37% average return rate since 1957, the ending balance would be $1,778,730.76, and if you were able to save $1,000 per month over 40 years at an 8.37% rate of return, your ending balance would be $3,557,461.52.Trying to time the market and only buy the dips isn't a great idea for most people. By selecting VOO as an investment vehicle for the S&P 500 and investing systematically every month, you will buy on the way up and down, but the time in the market will be your most significant ally.calculator.net/Why I prefer VOO compared to other S&P 500 index funds, and while I am still buying the S&P on the way upMy opinion is that as long as you're investing, you're well ahead of the game, but if you have the ability to choose, I prefer VOO to other S&P 500 ETFs. There are other investment vehicles, such as total market and target date funds, that have done well, but I prefer the S&P 500 index. The S&P 500 is comprised of the 500 largest U.S. publicly traded companies, with a primary emphasis on market capitalization. To be eligible for the S&P 500 index, a company needs to be U.S. based, have a market cap of at least $12.7 billion, have a public float of at least 10% of its shares outstanding, and must be GAAP profitable in its most recent quarter and the sum of the trailing twelve months (TTM) must be profitable.Steven Fiorillo, Seeking AlphaVOO and the SPDR S&P 500 ETF Trust (SPY) are arguably the 2 most well-known S&P 500 ETFs. While both funds will mimic the S&P 500 I prefer VOO for the simple reason of being cheap. I am invested in several funds from both Vanguard and State Street, but the determining factor of why I invested in VOO over SPY was the expense ratio and the dividend. When I am allocating capital and entrusting it to a financial institution to manage, I want the best return on my capital for the lowest amount of fees. VOO has an expense ratio of 0.03% which means for every $100,000 invested you're paying $30 in management fees vs. $90 for SPY. This may not sound like a lot, but if you're looking at the cost over a 40-year period, especially in the ladder years, that could be upward of over $10,000 of unnecessary fees that could have been capital appreciating in your account, depending on how much you're investing and for how long. The other reason is that the yield on VOO is slightly higher, and while 02% isn't much, it's something, and when compounded with the savings on management fees, it's just extra money in my pocket rather than someone else's.If you follow the markets, we are living through a tech-fueled rally. Some have made the case that the market is overvalued because the \"big 7\" accounts for almost all the S&P's gains in 2023. I don't subscribe to this because that's like saying the Chicago Bulls wouldn't have won 6 championships without Michael Jordan. Apple (AAPL), Microsoft (MSFT), Alphabet (GOOGL), Amazon (AMZN), Meta Platforms (META), Tesla (TSLA), and Nvidia (NVDA) are part of the S&P 500, they're not going anywhere, and to look at the market without them in it is a ridiculous idea.Looking at the S&P 500 earnings compared to the index price over the past 96 years, there is a distinct correlation between the two. At some periods, earnings which is the yellow line as outrun the historical price, but have always come back in line. Currently, the earnings-to-price correlation looks to be in sync. The next chart is a historical P/E average of the S&P, and as of May 2023, the S&P was trading at a P/E of 23.71. We're not trading anywhere near the 40 level on a P/E basis, and over time the market has continued to expand, and companies have generated larger amounts of profits.S&P 500 Earnings - 96 Year Historical ChartMacrotrendsS&P 500 PE Ratio - 96 Year Historical ChartMacrotrendsSince the market is being led by 7 stocks, I looked at their forward EPS projections and created a table below. AAPL, MSFT, GOOGL, AMZN, META, TSLA, and NVDA are all projected to grow their earnings considerably thru 2025, with double-digit YoY growth coming in almost every year for each company. Some may feel the market is overvalued, and I am not saying that the market can't retrace, but it's going to be hard to fight a bull market in 2024 when the Fed eventually starts cutting rates, and earnings are growing.Steven Fiorillo, Seeking AlphaConclusionVOO is my favorite S&P 500 ETF because a fantastic institution runs it, has an extremely low expense ratio, and generates slightly more yield than SPY. The historical data shows that time in the market outweighs short-term headlines and economic events. Maybe the market retraces a bit before its next leg up, and maybe we go into a recession which I don't think we will, but ultimately continuously investing in VOO has been a winning approach rather than trying to time the market. Sure, VOO has appreciated just over 20% in the past year, but most people investing in VOO are not looking at things from a short-term perspective. I feel it's better to get your money in when you can and benefit from the quarterly dividends and overall appreciation because timing the market is difficult, and few people can do it effectively. I continue to buy the S&P every 2-weeks as I am bullish on American business from a long-term perspective. VOO is a great vehicle to create long-term gains and increase personal wealth. Just keep buying, and your price per share will average itself out over time, and based on historical data, the returns should be favorable.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":106499766,"gmtCreate":1691402078762,"gmtModify":1691402085001,"authorId":3570058765891495,"author":{"id":3570058765891495,"idStr":"3570058765891495","authorId":3570058765891495,"name":"PhoenixBee","avatar":"https://community-static.tradeup.com/news/f7bfa4323a9a5dfacc73c8817a4e5e48","vip":1,"currentWearingBadge":{"badgeId":"cbe1c45c584340f3bd9ae6c77e0e9981-1","templateUuid":"cbe1c45c584340f3bd9ae6c77e0e9981","name":"Academy Experiencer","description":"5 lessons learned","bigImgUrl":"https://community-static.tradeup.com/news/fb5ae275631fb96a92d475cdc85d2302","smallImgUrl":"https://community-static.tradeup.com/news/c2660a1935bd2105e97c9915619936c3","redirectLinkEnabled":0,"hasAllocated":1,"isWearing":1,"stampPosition":0,"hasStamp":0,"allocationCount":1,"allocatedDate":"2023.10.19","individualDisplayEnabled":0,"individualDisplaySort":0,"categoryType":2006},"crmLevel":5,"crmLevelSwitch":1,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":757384424931504,"type":1,"supId":0,"prevId":0,"content":"Can buy cspx using tiger broker? What's S27?","text":"Can buy cspx using tiger broker? What's S27?","html":"Can buy cspx using tiger broker? What's S27?"},{"id":106432581,"gmtCreate":1687257998973,"gmtModify":1687258005160,"authorId":4104922920214630,"author":{"id":4104922920214630,"idStr":"4104922920214630","authorId":4104922920214630,"name":"Yx tan","avatar":"https://static.itradeup.com/news/8477b208f4a231ab1f8a4381c1d47c1a","vip":1,"crmLevel":5,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":757384424931504,"type":1,"supId":0,"prevId":0,"content":"<span class=\"s1\">Ok</span>","text":"<span class=\"s1\">Ok</span>","html":"<span class=\"s1\">Ok</span>"},{"id":106432574,"gmtCreate":1687257651276,"gmtModify":1687257657779,"authorId":4088323727093310,"author":{"id":4088323727093310,"idStr":"4088323727093310","authorId":4088323727093310,"name":"Runderk","avatar":"https://community-static.tradeup.com/news/7ab89eb83a2df01681bfe9344dd11f64","vip":1,"currentWearingBadge":{"badgeId":"1026c425416b44e0aac28c11a0848493-2","templateUuid":"1026c425416b44e0aac28c11a0848493","name":"Senior Tiger","description":"Join the tiger community for 1000 days","bigImgUrl":"https://static.tigerbbs.com/0063fb68ea29c9ae6858c58630e182d5","smallImgUrl":"https://static.tigerbbs.com/96c699a93be4214d4b49aea6a5a5d1a4","grayImgUrl":"https://static.tigerbbs.com/35b0e542a9ff77046ed69ef602bc105d","redirectLinkEnabled":0,"hasAllocated":1,"isWearing":1,"stampPosition":0,"hasStamp":0,"allocationCount":1,"allocatedDate":"2024.03.30","individualDisplayEnabled":0,"individualDisplaySort":0,"categoryType":1001},"crmLevel":1,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":757384424931504,"type":1,"supId":0,"prevId":0,"content":"<span class=\"s1\">Nice one</span>","text":"<span class=\"s1\">Nice one</span>","html":"<span class=\"s1\">Nice one</span>"},{"id":106432565,"gmtCreate":1687257461290,"gmtModify":1687257467662,"authorId":3576894243732437,"author":{"id":3576894243732437,"idStr":"3576894243732437","authorId":3576894243732437,"name":"SheldonT","avatar":"https://static.tigerbbs.com/625981ef1a7946c86d796615d591796b","vip":1,"crmLevel":9,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":757384424931504,"type":1,"supId":0,"prevId":0,"content":"<u>k</u>","text":"<u>k</u>","html":"<u>k</u>"},{"id":106432539,"gmtCreate":1687255756142,"gmtModify":1687255762711,"authorId":3574248655626938,"author":{"id":3574248655626938,"idStr":"3574248655626938","authorId":3574248655626938,"name":"Goldox","avatar":"https://static.tigerbbs.com/863110a9408a00f21e04f570ea1c03f2","vip":1,"crmLevel":3,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":757384424931504,"type":1,"supId":0,"prevId":0,"content":"[Like]","text":"[Like]","html":"[Like]"}],"langContent":"EN"}],"hasMoreComments":true,"newsSizeData":{"likeSize":19,"commentSize":1,"repostSize":2,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false}}