The SPDR S&P 500 ETF Trust (NYSE:SPY) is perhaps the most well-known Exchange Traded Fund (ETF) on the planet.
This ETF tracks the performance of the companies that make up the S&P 500, making this an attractive investing option for passive investors who are not concerned with beating the market, but rather are extremely content with receiving whatever the market return is, less the management expense ratio (MER) they will pay for access to this ETF.
There is a brilliance in simplicity, and for those who are comfortable with the stock chart of SPY over recent decades, there is certainly nothing wrong with buying and holding one well-diversified ETF like SPY.
Most financial experts will give the advice to never put all of one’s eggs in one basket, but when that basket tracks the overall market (and arguably the highest quality stocks in the market, or at least the largest), it can perhaps be the best and simplest way to invest over the long term.
For those passive investors seeking a “Swiss army knife” of an investment to just depend on for a few decades, SPY is an interesting place to go, at least for the equity exposure in a given portfolio.
It may be advisable to diversify further into fixed income (i.e. bonds) and alternative investments like real estate to truly hold a safe long term mix of assets. Keeping some liquidity on the sidelines at this point in time would also be advisable, in my opinion, as pretty much all markets look frothy at the moment.
Invest wisely, my friends.
