S&P 500 For 0 Knowledge Investing?

[energy_solutions]

Hey there peeps.. i’ve been hearing about people saying if you have 0 knowledge about investing, stock market and analysis, you can dollar cost average on index funds. Whats your view and is it true?

 

[ream]

@energy_solutions If U have enough emergency funds for >= 6 months' average living expense

+have enough medical/hospitalization insurances

+have enough death insurances if U have peopler dependent on U financially

+understand and have the discipline to execute a long term (more than 10 years) DCA into a low cost & wide basket ETF like SPY or VOO which covers the S&P500?

Then Yes. Note - $ in the ETF should be treated like EPF, locked up for a long time - can't touch this, hammer time! XD

Else.. need to fix the missing "portions" first (see each +).

PS: https://docs.google.com/spreadsheets/d/17L9RLBZTgCalcVLmQSQiXN_d8Xml978f26AXRlFBpqQ/edit?usp=sharing

This Google Sheet has several spreadsheets simulating investing in the 1990s+ until 2020s end dec. SPY is one of the ETFs tested there. i created these to share with my nieces, nephew, friends about long term investing - EVEN IF BOUGHT AT HIGHEST COST EVERY YEAR, long term consistency will pay off. Now, IF U add asset allocation & rebalancing discipline with consistent investing, that'll be your basic 1-2 knockout punch, without being a Wall Street expert

 

[georgiew]

@energy_solutions Zero knowledge going into anything is a recipe for disaster.

By not knowing about the theory of investing, you will end up investing with no aim and with a misguided expectation of the market.

By not knowing the history of the financial markets, you will be tempted to deviate into other forms of investments that promise higher returns than your index fund.

By not knowing the psychology of investing, you will fall victim to the ebb and flow of the market, and will not have the stomach to endure short term market downturns, potentially selling at a loss and forgoing long term gains.

By not being aware of the business of investing, you will be preyed upon by financial gurus whose only aim is to extract the maximum amount of money from your pocket into theirs.

A portfolio consisting of 100% S&P 500 is considered a high risk portfolio. The term "risk" has it's own meaning in finance. Maybe if you can at the very least endeavor to make sense that statement before jumping head first into it.

 

[letters2words]

@energy_solutions Statistically over the long term, yes, it does outperform well over 90% of active investing.

 

[gtfox26]

@energy_solutions well, if you did DCA since start of this year, you will be losing 10%, compared to losing 20% lumpsum in January.

 

[nyr94]

@energy_solutions typically yes, but have to make sure that you invest on a right index funds

 

[cowardlylion]

@energy_solutions Mostly true. Just be aware of the risks. And invest according your risk tolerance i.e. don't put all your money there obviously, keep a good amount of cash (FD) for rainy days.