Is S&P 500 A Good Buy?

Have you ever felt overwhelmed by being exposed to too many types of things? Like at the mall? Like Tokyo and its many ads? If yes, the stock market isn’t really for you.

Wait!! Before you go, what if it is? On par with knowing when to sell, knowing what to buy is the primary cause of stress in the market. There are over 5000 companies you can buy from, so how do you know which one to buy? Which of the 5000 stocks will give you decent returns, or which is the next to go bankrupt  (file for chapter 11) ?

Legendary investor; Warren Buffett has answered this question in the simplest way available. He suggests you BUY 500 COMPANIES. Please hold on a minute!! I’m struggling to buy one company, how will I buy 500? The answer is simple and let’s get into it right away.

The stock market Index is a representation of the market. Like it is generally believed in physics that gravitational constant always equals  (6.67 × 10-¹¹)  or pi in mathematics to equal  3.142 , stock market Index is believed to show the market.
There are different indexes for different markets, but for this article, we’ll focus on the S&P 500.

The Standard & Poor’s 500 is an index of the 500 largest companies in the US by market capitalization. You can’t buy the S&P 500 directly, but you can buy funds that track the S&P 500. By buying a share of these funds, you have bought all the 500 companies in the S&P. That’s why Warren Buffett suggested you buy 500 companies.

Let’s look at reasons why this may be a good idea and some reasons we don’t advise buying it.