When it comes to investing, everyone wants the secret sauce. The one trick that turns your hard-earned dollars into a mountain of wealth. But the truth is, the closest thing we have to a “magic formula” isn’t flashy, fast, or fueled by adrenaline. It’s boring. It’s steady. And it works.
It’s called long-term investing in the S&P 500.
The Power of Staying Put
If you had invested $10,000 in the S&P 500 back in 1993 and let it ride through tech booms, housing crashes, political chaos, pandemics, and meme-stock mania, that investment would be worth over $120,000 today.* That’s not because you outsmarted the market. It’s because you stayed in it.
(*Source: Based on historical S&P 500 total return data through 2023.)
When you zoom out and look at the market over decades, one truth emerges loud and clear: time in the market beats timing the market. And the S&P 500, an index tracking 500 of America’s largest companies, is one of the best tools for building long-term wealth.
Why the S&P 500?
Let’s break it down:
- Diversification: With 500 companies across all sectors, you’re not betting on one business—you’re betting on the economy.
- Historical Returns: Since its inception, the S&P 500 has returned an average of 10–11% annually, including dividends.
- Low Cost, High Value: Through index funds or ETFs, you can own the entire S&P 500 for pennies on the dollar in fees.
- Resilience: The market has weathered every type of storm and kept growing. That’s not luck—that’s capitalism in motion.
But What About the Crashes?
You might be thinking: “Yeah, but what if I had invested right before a crash?” Good question. Let’s look at a worst-case scenario:
If you had invested $10,000 in October 2007, literally the peak before the financial crisis, and did absolutely nothing, your portfolio would still have more than doubled by 2023.
In other words, the market always comes back. The key is to not jump ship during the storm.
Meet the Anti-Hero: Market Timing
Let’s say you tried to time the market instead. You got spooked during COVID, pulled your money out in March 2020, and waited for things to feel “safe” again. By the time you jumped back in, the S&P had already recovered most of its losses, and you missed one of the best 12-month stretches in history.
Missing just the 10 best days in the market over a 20-year period can cut your returns in half. Read that again. Half.
The Secret Sauce is Boring
Warren Buffett doesn’t pick flashy tech IPOs. He buys American companies and holds them… forever. The same playbook can work for you:
- Buy a low-cost S&P 500 index fund
- Set up automatic contributions
- Ignore the noise
- Repeat until wealthy
No crypto hype. No Reddit YOLOs. Just real, compounding wealth.
The Takeaway
Long-term investing in the S&P 500 isn’t exciting, but it is effective. So the next time you’re tempted to check your portfolio five times a day or chase the next big thing, remember this:
The market rewards patience. The S&P 500 rewards believers. And you? You’re too legit to quit.
The information contained herein is intended to be used for educational purposes only and is not exhaustive. Diversification and/or any strategy that may be discussed does not guarantee against investment losses but are intended to help manage risk and return. If applicable, historical discussions and/or opinions are not predictive of future events. The content is presented in good faith and has been drawn from sources believed to be reliable. The content is not intended to be legal, tax or financial advice. Please consult a legal, tax or financial professional for information specific to your individual situation.
This content not reviewed by FINRA
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