2024-05-07 22:06:20 ET
Summary
- The S&P 500 index fund, SPY, has historically climbed due to factors like rebalancing, mergers, acquisitions, positive economic data, and moderate inflation.
- Overseas expansion has allowed S&P 500 companies to diversify their income sources and increase profit margins, impacting the value of SPY.
- Shrinking markets in China, Asia, Russia, the Middle East, and South America pose a threat to US companies and could negatively impact the S&P 500.
Preamble
Let me begin by citing the words of Warren Buffett; “In my view, for most people, the best thing to do is own the S&P 500 index fund,” indeed, Berkshire Hathaway owns S&P 500 (SPY). After all, SPY is designed to drift upwards forever.
The S&P index undergoes a tune up quarterly, which involves the removal of laggards and the promotion of fresh talent. In this way, the overall quality of the index improves and has the effect of enabling SPY to climb ever upwards....
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For further details see:
SPY: The Shrinking Market For U.S. Companies