Have S&P 500 Index Funds, Often Touted as the Best Stock Investments, Become Dangerous? There's a Worrisome Development -- and a Possibly Better Alternative.
The hard-earned dollars you park in a standard S&P 500 index fund may not be distributed the way you think they are.
Have S&P 500 Index Funds, Often Touted as the Best Stock Investments, Become Dangerous? There's a Worrisome Development -- and a Possibly Better Alternative.
Overview
What's the investment I've recommended most often for most people? A low-fee exchange-traded fund (ETF) that tracks the S&P 500 index, such as the Vanguard S&P 500 ETF (NYSEMKT: VOO) or the SPDR S&P 500 ETF (NYSEMKT: SPY). I suspect many of my colleagues would say the same. Even Warren Buffett has recommended it. In his 2016 letter to shareholders, he noted, "Over the years, I've often been asked for investment advice... My regular recommendation has been a low-cost S&P 500 index fund."
So I'm sorry to point out that it's not a perfect kind of investment. It has some issues.
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Originally published at www.fool.com.
