Should We All Just Buy The S&P 500?

Summary

The video script discusses the common advice to invest in the S&P 500, a market capitalization-weighted index of 500 of the largest publicly traded companies in the U.S. It explains why this is a popular strategy due to its diversification, historical performance, low fees, and ease of investment. However, it also highlights potential downsides such as lack of international diversification, sector concentration risk, overvaluation concerns, and limited exposure to small-cap stocks. The script then explores alternatives like investing in an All-World Fund ETF for global diversification. It also compares the S&P 500 to an 'almost daily dividend portfolio', considering factors like risk spreading, historical performance, fees, and ease of investment. The video concludes by suggesting that investors might consider a balanced approach, including both the S&P 500 and dividend-focused portfolios, and offers a free PDF guide on dividend investing strategies.

Takeaways

• 📈 Investing in the S&P 500 is a common recommendation due to its representation of the 500 largest publicly traded companies in the US and its role as a key economic indicator.
• 🌐 The S&P 500 is a market capitalization-weighted index that includes companies from various sectors, offering diversification and reducing risk by spreading investments across multiple industries.
• 💼 To invest in the S&P 500, one can use index funds or ETFs that replicate the index's composition, which are accessible through investment apps or brokerages.
• 💰 Historically, the S&P 500 has shown an average annual growth of about 10%, making it a potentially solid choice for long-term investors.
• 📉 Despite its benefits, investing solely in the S&P 500 may lack diversification across other regions, asset classes, and smaller companies.
• 📊 The S&P 500 can be influenced by sector concentration, overvaluation concerns, and may not always represent the best growth opportunities compared to other markets.
• 🌍 An alternative to the S&P 500 could be investing in an All-World fund ETF, which offers exposure to a broader global equity market.
• 🏦 Investing in the S&P 500 typically involves lower fees due to the passive management strategy of index funds and ETFs, as well as economies of scale.
• 👌 Both the S&P 500 and the Almost Daily Dividends portfolio can be easily invested in through platforms like Trading 212, making them accessible to a wide range of investors.
• 🤔 The choice between investing in the S&P 500 or the Almost Daily Dividends portfolio depends on individual preferences for risk, diversification, and dividend frequency.
• 📚 The video suggests that rather than choosing one over the other, investors might consider a balanced approach, incorporating elements from both strategies to align with their financial goals.

Q & A

What is the S&P 500 and why is it commonly recommended for investment?

The S&P 500, or Standard & Poor's 500, is a market capitalization-weighted index consisting of 500 of the largest publicly traded companies in the United States. It is commonly recommended because it offers diversification across various sectors, has a history of long-term growth, typically entails lower fees compared to other investments, and is easy to invest in through index funds or ETFs.

How does the S&P 500 serve as an indicator of the US economy's health?

The S&P 500 provides insights into the overall health of the US stock market and the economy. When the index rises, it suggests that the value of the collective stocks of the included companies is increasing, reflecting positive sentiment and economic growth. Conversely, a decline may indicate economic uncertainty or downturn.

How can an individual invest in the S&P 500?

Individuals can invest in the S&P 500 through index funds or exchange-traded funds (ETFs) that track the performance of the index. These funds pool money from multiple investors to buy shares of the companies included in the S&P 500. Investors can purchase shares of these funds through brokerage accounts, retirement accounts, or investment platforms.

What are some downsides to investing solely in the S&P 500?

While the S&P 500 offers diversification, it is heavily focused on the US market, which means investors may miss out on opportunities in other regions and asset classes. There is also the risk of sector concentration, where the performance of certain sectors can disproportionately impact the index. Additionally, there may be concerns of overvaluation, and the index excludes smaller companies that could offer higher growth potential.

What is an alternative to investing in the S&P 500 for global diversification?

An alternative is to invest in an All-World fund ETF, also known as a global equity fund ETF or total world ETF. This type of ETF invests in stocks from companies around the world, providing broad exposure to the global equity market and diversifying the portfolio across various countries, regions, industries, and sectors.

What is the Almost Daily Dividends portfolio and how does it compare to the S&P 500?

The Almost Daily Dividends portfolio is a collection of dividend-paying stocks designed to provide regular income to investors. It is not directly comparable to the S&P 500, as it focuses on dividend frequency and may have fewer holdings. However, it can be considered as an alternative for those seeking income investments, with its own set of risks and potential rewards.

How does the diversification offered by the S&P 500 compare to that of the Almost Daily Dividends portfolio?

The S&P 500 offers diversification across 500 companies in various sectors, while the Almost Daily Dividends portfolio has 50 stocks. Although the S&P 500 has more holdings, studies suggest that having about 20 to 30 stocks is sufficient to diversify away market risk, making the diversification of the Almost Daily Dividends portfolio relatively comparable.

What are the historical performance trends of the S&P 500 and the Almost Daily Dividends portfolio?

The S&P 500 has a history of long-term growth, averaging about a 10% increase per year. The Almost Daily Dividends portfolio, being established in September 2020, has a shorter history. Over the past 5 years, the S&P 500 has shown a return of 14.68%, while the Almost Daily Dividends portfolio has a lower return of 11.33%.

What are the fee structures for investing in the S&P 500 and the Almost Daily Dividends portfolio?

Investing in the S&P 500 typically involves low fees due to the passive management strategy of index funds and ETFs. There may be an ongoing fee, usually around 0.07%. The Almost Daily Dividends portfolio has no ongoing fee but incurs a foreign currency fee of 0.15% from Trading 212 and a potential 2% fee if you buy or invest in the portfolio.

How does the ease of investing in the S&P 500 compare to the Almost Daily Dividends portfolio?

Both the S&P 500 and the Almost Daily Dividends portfolio are easy to invest in, thanks to platforms like Trading 212 that allow for simple investment through a few clicks. The main difference is that the Almost Daily Dividends portfolio requires signing up to an email list to get updates about the portfolio and any changes made to it.

What is the author's perspective on choosing between the S&P 500 and the Almost Daily Dividends portfolio?

The author suggests that if an investor does not care about dividends or dividend frequency, the S&P 500 might be the better choice. However, for those seeking income, the Almost Daily Dividends portfolio is more suitable. The S&P 500 may outperform during bull markets but will also experience greater drops during bear markets. The author also mentions that it's reasonable to have both in a diversified portfolio.

Outlines

00:00

📊 Investing in the S&P 500: The Golden Rule of Investing?

This paragraph introduces the common advice given on online finance forums to invest in the S&P 500, questioning its validity and suggesting there may be issues with this approach that are not widely discussed. The S&P 500 is explained as a market capitalization-weighted index of 500 large U.S. companies, with a rigorous selection process overseen by S&P Dow Jones Indices. The index's performance is a key indicator of the U.S. economy's health, and it serves as a benchmark for investment portfolios. The paragraph also outlines how one can invest in the S&P 500 through index funds or ETFs, with examples provided from Vanguard, and mentions the use of trading platforms like Trading 212, which offers a promo code for new users.

05:01

🤔 The Pros and Cons of Investing in the S&P 500

The second paragraph delves into the reasons why people recommend investing in the S&P 500, such as diversification across various industries, historical performance with an average annual growth of about 10%, lower fees due to passive management, and ease of investment for all investor profiles. It also addresses the downsides of this strategy, including a lack of diversification outside the U.S. market, sector concentration risk, potential overvaluation, and limited exposure to small and mid-cap stocks. The paragraph challenges the notion that the S&P 500 is the only way to invest and suggests considering other options.

10:02

🌐 Exploring Alternatives to the S&P 500: Global Diversification

This paragraph discusses the limitations of investing solely in the S&P 500 and introduces the concept of global diversification as an alternative strategy. It mentions the potential risks of focusing only on U.S. stocks and suggests considering all-world funds, which are ETFs that invest in companies globally, providing exposure to a broader range of industries and sectors. The paragraph also compares the historical performance of U.S. stocks to international stocks, highlighting the importance of considering a longer-term perspective beyond recent trends.

15:03

💰 Comparing the S&P 500 with the Almost Daily Dividends Portfolio

The final paragraph compares the S&P 500 with the Almost Daily Dividends portfolio (Pi), discussing the differences in diversification, historical performance, fees, and ease of investment. It acknowledges that while the S&P 500 has a longer history and more holdings, the Almost Daily Dividends portfolio offers a different approach with a focus on dividend income. The paragraph suggests that investors may choose between the two based on their interest in dividends and market conditions, and it encourages viewers to consider a balanced approach by including both in their investment strategy. The video concludes with an offer of a free PDF guide on dividend investing and an invitation to join an email list for updates and special offers.

Keywords

💡S&P 500

The S&P 500, or Standard & Poor's 500, is a market capitalization-weighted index of 500 of the largest publicly traded companies in the United States. It spans various sectors of the economy and serves as a benchmark for evaluating the performance of investment portfolios. In the video, it is discussed as a common investment advice, often recommended due to its diversification, historical performance, and low fees. However, the script also points out potential downsides, such as lack of international diversification and sector concentration risk.

💡Investing

Investing refers to allocating resources, such as money, with the expectation of generating income or profit. In the context of the video, it primarily discusses investing in the S&P 500 through index funds or ETFs. The script challenges the notion that investing solely in the S&P 500 is the only way to grow wealth, suggesting that there might be other strategies or considerations that could be more suitable depending on individual goals.

💡Diversification

Diversification is an investment strategy that involves spreading investments across various financial instruments, industries, or other categories to minimize risk. The video mentions that investing in the S&P 500 offers diversification because it includes companies from different sectors, which helps reduce risk by not relying on the success of any single company. However, it also points out that the S&P 500 lacks diversification in terms of international markets and asset classes.

💡Index Funds

Index funds are a type of investment fund with a portfolio constructed to match or track the components of a financial market index, such as the S&P 500. They are designed to replicate the performance of the index they track. The script explains that one common way to invest in the S&P 500 is through index funds or ETFs, which offer a cost-effective way to gain exposure to the index due to their low expense ratios.

💡ETFs (Exchange-Traded Funds)

ETFs are investment funds that are traded on stock exchanges much like individual stocks. They track an index, a commodity, bonds, or a basket of assets and aim to replicate the performance of the assets they hold. The video script uses ETFs as an example of how investors can invest in the S&P 500, highlighting their ease of access and the passive management strategy that typically results in lower fees.

💡Risk Management

Risk management in investing involves the identification, evaluation, and prioritization of risks followed by coordinated efforts to minimize, monitor, and control the probability or impact of unfortunate events. The video discusses how investing in the S&P 500 can be a form of risk management due to its diversification across multiple sectors and companies, which can help mitigate the impact of poor performance by any single company.

💡Market Capitalization

Market capitalization is the total market value of a company's outstanding shares of stock. It is calculated by multiplying a company's shares outstanding by the current market price of one share. The S&P 500 is a market capitalization-weighted index, meaning that companies with higher market values have a greater impact on the index's performance. The script explains that the index is weighted by market capitalization to ensure that larger companies influence the index more than smaller ones.

💡Compounding Returns

Compounding returns refer to the interest or total return earned on an investment's earnings over time. It is the effect of earning returns on the initial investment as well as on the accumulated earnings. The video script mentions that sticking with the S&P 500 for the long term can be beneficial due to the potential for compounding returns, which allows the investment to grow over time.

💡Sector Concentration Risk

Sector concentration risk is the risk that a portfolio's heavy exposure to a particular sector could lead to significant losses if that sector underperforms. The video script points out that the S&P 500 can be heavily influenced by the performance of certain sectors at different times, such as technology stocks in recent years, which could disproportionately impact the overall performance of the index and investment returns.

💡Overvaluation

Overvaluation occurs when the market price of a stock or a market index is considered to be higher than its actual value based on certain metrics or historical trends. The script mentions that at certain times, the S&P 500 may be considered overvalued, which could lead to lower returns or losses if stock prices revert to more reasonable levels.

💡All World Fund ETF

An All World Fund ETF, also known as a global equity fund ETF or total world ETF, is an investment vehicle that invests in stocks from companies all around the world, providing broad exposure to the global equity market. The video script discusses this as an alternative to investing solely in the S&P 500, allowing investors to diversify their portfolio across different regions and asset classes, which can potentially reduce risk.

💡Dividend Investing

Dividend investing is a strategy where an investor selects stocks of companies that pay dividends, which are a portion of the company's earnings distributed to shareholders. The video script mentions a comparison between investing in the S&P 500 and the 'almost daily dividends' portfolio, which is an alternative strategy focused on dividend-paying stocks. The script suggests that while the S&P 500 might outperform during bull markets, it could also experience greater drops during bear markets compared to a dividend-focused portfolio.

Highlights

Investing in the S&P 500 is widely recommended in online finance forums, often without understanding the full implications.

The S&P 500 is a market capitalization-weighted index of 500 large publicly traded companies in the US.

The index includes companies from various sectors like technology, healthcare, finance, consumer goods, and industrials.

The S&P 500 serves as a benchmark for the overall health of the US stock market and economy.

Investing in the S&P 500 offers diversification across multiple sectors, reducing the risk associated with individual companies.

The S&P 500 has a historical average annual return of about 10%, making it a solid choice for long-term investors.

Index funds and ETFs that track the S&P 500 offer low expense ratios, making them a cost-effective investment option.

Investing in the S&P 500 is straightforward and accessible to investors of all backgrounds.

There are downsides to solely investing in the S&P 500, such as lack of diversification across regions and asset classes.

The S&P 500's performance can be heavily influenced by certain sectors, leading to sector concentration risk.

Investing in an overvalued market could lead to lower returns or losses if stock prices revert to more reasonable levels.

The S&P 500 excludes small-cap and mid-cap stocks, which may offer higher growth potential.

An alternative to the S&P 500 is an all-world fund ETF, which provides exposure to a broader range of global equities.

Comparing the S&P 500 to the 'Almost Daily Dividend' portfolio reveals differences in diversification, history, and fees.

It's possible to invest in both the S&P 500 and other diversified portfolios to balance risk and return.

Transcripts

the go-to advice on pretty much any

online Finance Forum ever seems to be

just invest in the S&P 500 bro as it's

banded about so often even people who

don't understand what investing in the

S&P 500 actually entails still power at

it as if it's the golden rule of

investing and anyone doing something

else is a what if I told you

there's some issues with simply

investing in the S&P 500 that you

probably weren't aware of and following

generic advice you find from overly

confident people online might not

actually suit your goals in this video

we will look at what exactly investing

in the S&P 500 is why it's the common

go-to advice what the downsides are and

what people might be missing finally as

it's asked so often I'll also compare

investing in the almost daily dividend

portfolio with the S&P 500 and which

might suit your goals better hello and

welcome back to the dividend experiment

the channel that helps you build a

portfolio that pays your bills the

content that'll be discussed is intended

for information and educational purposes

only it should not be considered

investment advice or investment

recommendation firstly what is the S&P

500 and how do you even invest in it the

S&P 500 or standard and pause 500 is a

market capitalization weighted index

that consists of 500 of the largest

publicly traded companies in the United

States so S&P is short for standard and

pores which is a rating agency and 500

just means the 500 companies these

companies span various sectors of the

economy including technology Healthcare

Finance consumer goods and Industrials

the selection process for inclusion in

the S&P 500 is rigorous and conducted by

the S&P Dow Jones indices a division of

S&P Global factors considered include

market capitalization which is the total

value of the company's outstanding

shares liquidity or how easily shares of

a company can be bought or sold and

Industry

representation companies must meet

specific criteria to be eligible such as

being based in the US having minimum

market capitalization and having

positive earnings for the most recent

four quarters the index is weighted by

market capitalization meaning that

companies with higher Market values have

a greater impact on the index's

performance this ensures that larger

companies influence the index more than

smaller ones the performance of the S&P

500 is closely watched by investors

economists policy makers and analysts

because it provides insights into the

overall health of the US Stock Market

and to the economy too when the index

Rises it suggests the value of the

collective stocks of the included

companies is increasing reflecting

positive sentiment and economic growth

conversely a decline in the index May

indicate economic uncertainty or

downturn basically a lot of the time

when people say the market is doing this

or the market is doing such and such

they actually mean the US Stock Market

specifically and the S&P 500 as a

representation of that Additionally the

S&P 500 serves as a benchmark for

evaluating the performance of investment

portfolios in individual stocks

investors will often compare their

portfolio returns to the returns of the

S&P 500 to assess how well their

Investments are doing relative to the

broader

Market overall the S&P 500 plays a

significant role in financial markets

and serves as a key indicator of the

state of the US economy in other words

it's a pretty big deal when it comes to

investing but how do you invest in it

basically you need to find a fund

provider and an investment app or

brokerage let me explain how to do both

one common way to invest in the S&P 500

is through index funds or exchange

traded funds ETFs that track the

performance of the index These funds

pull the money from multiple investors

to buy shares of the companies included

in the S&P 500 in proportions that mimic

the index's composition investors can

buy shares of these funds through

brokerage accounts retirement accounts

or investment platforms index funds

typically offer low expense ratios

making them a cost- effective way to

gain exposure to the S&P 500 here's some

examples these two are from Vanguard

which is one of the most well-known and

trusted investment management companies

in the world the tickers here are V USA

and vag the differences are that V USA

pays out a dividend and vag reinvests it

for you so it's a personal choice of

preference but these are just two

examples of funds that people can use to

invest in the S&P 500 you might be able

to find ones that are better or cheaper

but we don't really have the scope to go

into that in this video so now we have

the fund we also need the Investment app

and if you followed the channel for a

while you know that I recommend trading

to 212 is the best option for the

majority of use cases and users and in

this video it's going to be no different

on top of that I asked trading 212 if

they could give me a unique code that

you guys can simply type into the promo

code section Capital At Risk so if

you've opened up a new account recently

or planning to open an account then here

it is div XP or divv exp short for

dividend experiment so you have 10 days

from opening your account to type this

in and receive shares worth up to100

pound I also get something is this is my

custom code so this helps you support

the channel too and if you do use it

thank you for your support and thanks to

trading 212 for sponsoring this video so

now we have a fund and a way to buy it

but it leaves the bigger question should

we just buy the S&P 500 so imagine you

have some money and you want to invest

it to make more money over time one

popular way people do this is by

investing in the S&P 500 here's why

people often suggest investing in the

S&P 500 spreading the risk investing in

the S&P 500 offers diversification

across a wide array of companies

spanning various Industries including

technology Healthcare and finance each

company operates independently so the

success or failure of one isn't directly

tied to the others this diversification

helps reduce Risk by spreading your

investment across multiple sectors

shielding you from the potential

negative impact of poor performance in

any single company moreover because your

investment is spread across 500

companies the impact of individual

company performance is minimized even if

one company such as is let's call it

company a performs poorly the gains from

other companies that are thriving can

help offset those losses essentially

you're not rying on the success of any

single company to make money providing a

more stable investment approach this

risk management strategy combined with a

historical long-term growth Trend

mirroring the overall US economy

positions investors to benefit from

potential growth while mitigating the

risk associated with individual

companies fluctuations reason two good

history the S&P 500 has a history of

doing well for investors on average it's

gone up by about 10% each year this

means that if you put your money into

the S&P 500 it has a good chance of

growing by around 10% every year on

average though of course past results

are not an indication of future returns

this success is tied to how US economy

grows over time when the economy does

well companies make more money and their

stock prices usually go up the S&P 500

reflects this growth making it a solid

choice for long-term investors plus even

though the stock market can be bumpy in

the short term sticking with the S&P 500

for the Long Haul often pays off this is

because your investment can keep growing

over time thanks to something called

compounding returns so by staying

patient and sticking with it you can

benefit from the Market's tendency to

bounce back and bring in positive

results reason three you pay less in

fees investing in the S&P 500 typically

entails lower fees compared to other

investment options for a few key reasons

firstly index funds and ETFs that track

the S&P 500 operate on a no passive

management strategy meaning they aim to

replicate the index's composition rather

than actively pick and choose stocks and

therefore paying trading fees this

passive approach reduces the need for

costly fund managers and extensive

research resulting in lower fees for

investors Additionally the popularity of

these funds among investors allows them

to benefit from economies of scale

spreading fixed costs across a larger

pool of assets and further driving down

fees since the index's composition

doesn't change frequently these funds

don't need to make frequent adjust ments

to their Holdings reducing transaction

costs and reason for it's easy to do

investing in the S&P 500 is not only

accessible but also straightforward for

investors of all backgrounds you don't

need to be a financial expert to get

started through specialized investment

funds known as index funds which are

readily available through banks and

investment companies investors can

easily gain exposure to the S&P 500

investing in the S&P 500 follows a

passive strategy where investors

essentially go along with a broader

Market rather than trying to outs Market

this approach eliminates the stress and

complexity associated with picking

individual stocks and trying to time the

market instead investors can simply

trust in the long-term growth potential

of the US economy and Studies have shown

that passive investing strategies such

as investing in the S&P 500 often yield

favorable results over the long term by

embracing a hands-off approach and

letting the market do its work investors

can benefit from the Market's overall

upward trajectory while avoiding the

pitfalls of active trading so these are

some pretty compelling reasons to invest

in the S&P 500 and to be clear I don't

think simply choosing to invest in One

Fund that tracks the S&P 500 is a bad

idea for many people however there are

downsides that are never really

discussed when people give the advice

that it's the only way to

invest lack of

diversification now I know what you're

thinking I just said the S&P 500 was

diverse how can it be a downside too

while the S&P 500 provides exposures to

a wide range of companies across

different SE sectors is still heavily

focused on the US market by investing

solely in the S&P 500 you may miss out

on opportunities for diversification

across other regions and asset classes

such as International stocks or bonds or

real estate and commodities and

diversifying your portfolio can help

reduce risk and improve returns over the

long

term sector concentration risk the

composition of the S&P 500 is not static

and can be heavily influenced by the

performance of certain sectors at

different times

for example technology stocks have had a

significant weight in recent years if a

particular sector experiences a downturn

it can have a disproportionate impact on

the overall performance of the index and

your investment returns overvaluation

concerns at certain times the S&P 500

may be considered overvalued based on

metrics like price to earning ratios or

historical Trends investing in an

overvalued Market could potentially lead

to lower returns or even losses if stock

prices revert to more reasonable levels

and finally limited exposure to small

cap and midcap stocks while the S&P 500

includes 500 of the largest US companies

it therefore excludes smaller companies

known as small cap and midcap stocks

these companies may offer higher growth

potential compared to their larger

counterparts but they're not represented

by the index by investing solely in the

S&P 500 you miss out on the potential

benefits of these smaller

companies so what's an alternative Nick

muli on his blog of dollars and data has

a great post on this topic should your

portfolio be 100% US Stocks he writes

after looking at this plot you might

argue there's no point in owning

International stocks CU they simply

haven't performed as well as US stocks

in the past and while this is

technically true a lot of the argument

hinges on data from the most recent

decade when we control for this recency

bias US Stocks don't look quite as

impressive for example if we run this

exact same analysis back in 2013 which

would have excluded the last 10 years US

Stocks would have only outperformed

International stocks in 41% of all

rolling 10-year periods as you can see

in this plot from 1970 to 2013 US Stocks

were more likely to underperform than

outperform International stocks over a

random 10-year window it's because of

this recency bias that telling people

they should only invest in US Stocks

sounds like smart solid advice but who

knows what the future holds and whether

the US will outperform going forward too

one alternative is to invest in all

World fund an all World fund ETF also

known as a global Equity Fund ETF or

total World ETF is an exchange traded

fund that invests in stocks from

companies all around the world across

various countries and regions these ETFs

aim to provide investors with broad

exposure to the global Equity Market in

a single investment

vehicle the composition of an all World

fund ETF typically includes stocks from

both developed and Emerging Markets

covering a wide range of Industries and

sectors by investing in such ETF

investors can gain exposure to thousands

of companies worldwide diversifying

their portfolio and potentially reducing

risk all World ETFs are designed to

track the performance of specific Global

Equity index such as the msci all

country World index or the footsie all

World index these indexes represent the

overall Global Equity market and include

stocks from both developed and emerging

economies you can find these types of

funds on trading 22 and maybe I'll make

another video on different types of

these and what they all mean if you want

finally as I said at the beginning of

the video I'll compare the almost daily

dividends pi to the S&P 500 now this is

a very common question on the pi should

you just invest in the S&P 500 instead

of the almost daily dividends P now at

first these two types of Investments

aren't really comparable in my opinion

so it's strange to me to consider them

as a verses but if we look back at those

four points I mentioned earlier about

why the S&P 500 is touted as a good

investment strategy we can see if they

apply to the almost daily dividend P too

so first was was spreading the risk the

S&P 500 has well 500 stocks in it

whereas the almost daily dividend P has

50 that's 10 times less so S&P 500

clearly wins here in terms of number of

Holdings however if you watch this video

I made recently you only really need

about 20 to 30 stocks to diversify away

the market risk so we can argue It's

relatively even there second reason was

good history I made the almost daily

dividends p in SE setember 2020 so in

terms of length of History the S&P 500

obviously wins however we can use the

feature on trading 2 on2 pi to check the

returns of the past 5 years it's called

the a so if we look at the S&P a in The

Last 5 Years while not forgetting that

post from Nick muli we looked at earlier

about recency bias we can see that it's

14.68% then looking at the almost daily

dividend portfolio we can see it is

lower at

11.33% okay next one Pay Less in fees

but the S&P is very cheap however it

does come with the ongoing fee depending

on which fund provider you go with

usually these are very very small like

0.07% but there is a fee the fee you

have to pay on the almost daily dividend

p is slightly different in structure

there's no ongoing fee so no fee to hold

on to it but you do pay a foreign

currency fee of 0.15% from training 2

and two if you buy or invest in this pie

so pretty cheap too really easy to do

both are super easy to do thanks to the

pi feature you can invest in either with

a few clicks thanks to trading 2 on two

pies the only difference really is the

almost da dividend Pi is best when you

sign up to the email list to get updates

about the p and any changes I make to

it my thoughts fairly comparable

offering but here are my thoughts on the

two options if you literally don't care

about dividends or don't care about

dividend frequency then just go for the

S&P 500 that's the main offering and

purpose of the pi if you do want income

then the pi is obviously

the S&P 500 will likely outperform

during the good times or bull markets

however it will also drop more than the

almost daily div pie during downtimes or

bare markets my other thought is that

you don't necessarily need to do an

either or it's perfectly reasonable to

have both and you can see how I

structure this and my entire philosophy

on investing in my video called the

metronome if you like this video and if

you made it this far I'm guessing you

probably did then I have some good news

for you I'm giving away my PDF Guide to

the 10 dividend investing Commandments

or the criteria that I use to pick

dividend paying stocks and I'm giving it

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