{"id":21384,"date":"2025-10-02T22:16:09","date_gmt":"2025-10-02T22:16:09","guid":{"rendered":"https:\/\/finderica.com\/?p=21384"},"modified":"2025-10-02T22:16:09","modified_gmt":"2025-10-02T22:16:09","slug":"sp-500-set-it-and-forget-it-strategy-due-for-a-rethink-experts","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=21384","title":{"rendered":"S&#038;P 500 set-it-and-forget-it strategy due for a rethink: experts"},"content":{"rendered":"<div id=\"SpecialReportArticle-ArticleBody-6\" data-module=\"ArticleBody\" data-test=\"articleBody-2\" data-analytics=\"SpecialReportArticle-articleBody-6-2\"><span class=\"HighlightShare-hidden\" style=\"top:0;left:0\"><\/span><\/p>\n<div class=\"InlineImage-imageEmbed\" id=\"ArticleBody-InlineImage-106819384\" data-test=\"InlineImage\">\n<div class=\"InlineImage-wrapper\">\n<div>\n<p>Trevor Williams | DigitalVision | Getty Images<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"group\">\n<p>The <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"SpecialReportArticle-QuoteInBody-1\">S&amp;P 500 index<span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span> closed at a new all-time high on Wednesday amid a federal government shutdown. It rose to a new intraday high early Thursday.<\/p>\n<p>Prior to that, the index \u2014 which is focused on large-cap U.S. equities \u2014 had risen almost 90% since the equity bull market began three years ago, thanks in large part to new AI developments, <a href=\"https:\/\/www.morganstanley.com\/pub\/content\/dam\/mscampaign\/wealth-management\/wmir-assets\/gic-weekly.pdf\" target=\"_blank\" rel=\"noopener\">Morgan Stanley Wealth Management<\/a> noted in Sept. 29 research.<\/p>\n<p>Nevertheless, experts say it may be time to reconsider the set-it-and-forget-it S&amp;P 500-focused strategy, famously touted by legendary investor Warren Buffett.<\/p>\n<p>&#8220;The S&amp;P 500 is broken,&#8221; said Michael DeMassa, who is a certified financial planner and chartered financial analyst, and the founder of Forza Wealth Management in Sarasota, Florida.<\/p>\n<p>Many investors assume investing in the S&amp;P 500 index \u2014 through ETF ticker symbols <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"SpecialReportArticle-QuoteInBody-5\">SPY<span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span>, <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"SpecialReportArticle-QuoteInBody-6\">VOO<span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span> or <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"SpecialReportArticle-QuoteInBody-7\">IVV<span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span> \u2014 is synonymous with diversification, DeMassa said.<\/p>\n<\/div>\n<div role=\"region\" aria-labelledby=\"Placeholder-ArticleBody-Video-108205168\">\n<div role=\"button\" tabindex=\"0\" id=\"Placeholder-ArticleBody-Video-108205168\" class=\"PlaceHolder-wrapper\" data-vilynx-id=\"7000390398\" data-test=\"VideoPlaceHolder\">\n<div class=\"InlineVideo-videoEmbed\" id=\"InlineVideo-0\" data-test=\"InlineVideo\">\n<div class=\"InlineVideo-wrapper\">\n<div class=\"InlineVideo-inlineThumbnailContainer\"><span class=\"InlineVideo-videoButton\"><\/span><span><\/span><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"group\">\n<p>Yet that sense of safety is an illusion, he said, since the market capitalization-weighted index means companies with bigger allocations may drag down the fund if their performance suffers. Or the index&#8217;s heavy concentration in the technology sector may prompt volatility to ripple through the entire index, DeMassa said.<\/p>\n<p>If you can invest in the S&amp;P 500 index for a long time, you will probably do well, said Deva Panambur, a CFP and CFA, and founder of Sarsi LLC in West New York, New Jersey.<\/p>\n<p>But occasionally the index suffers long periods of underperformance, he said. For example, between 2000 and 2008, the S&amp;P 500 was down by more than 30%.<\/p>\n<p>Wall Street forecasts generally see the index continuing to go up for the foreseeable future.<\/p>\n<p>Still, experts say it&#8217;s best to choose a broader investment mix in case there is a pullback.<\/p>\n<\/div>\n<h2 class=\"ArticleBody-subtitle\"><a id=\"headline0\"><\/a>How to best diversify your investments now<\/h2>\n<div class=\"group\">\n<p>For investors who are seeking a simple approach, it may make sense to opt for a total market index fund instead of an S&amp;P 500 index fund, according to Brendan McCann, associate manager research analyst at Morningstar.<\/p>\n<p>Unlike S&amp;P 500 index funds, total market funds also provide exposure to small- and mid-cap stocks in addition to large-cap companies.<\/p>\n<p>Alternatively, investors may opt to broaden the exposure an S&amp;P 500 index fund already provides in their portfolio. One example may be a fund that tracks a total market index that excludes S&amp;P 500 index stocks, or the Vanguard Extended Market ETF, according to McCann.<\/p>\n<\/div>\n<div class=\"group\">\n<div class=\"RelatedContent-relatedContent\" id=\"SpecialReportArticle-RelatedContent-1\">\n<div class=\"RelatedContent-container\">\n<div class=\"RelatedContent-nonCollapsibleContent\">\n<h2 class=\"RelatedContent-header\">More from Financial Advisor Playbook:<\/h2>\n<div class=\"group\">\n<p>Here&#8217;s a look at other stories affecting the financial advisor business.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"group\">\n<p>The trick with that strategy is to buy the funds in the right proportion, McCann said.<\/p>\n<p>For investors who don&#8217;t want to worry about changing their asset allocations over time, buying a total market index fund may be a better approach, according to McCann. Switching to a total market index fund strategy may be particularly attractive for investors who don&#8217;t have to worry about the tax implications of changing funds, such as 401(k) investors, he said.<\/p>\n<p>Other experts have recommended opting for equal-weighted S&amp;P 500 index funds, which hold an equal proportion of each stock. However, the downside with those strategies is that there may be more transaction costs when rebalancing, McCann said.<\/p>\n<p>When the S&amp;P 500&#8217;s returns were down between 2002 and 2009, areas like small cap, value, international and even bonds performed better than stocks, Panambur said.<\/p>\n<p>Today, the portfolios he creates for clients have allocations to those areas.<\/p>\n<p>&#8220;When I look at the overall allocation, my goal is to make sure it&#8217;s more balanced than the S&amp;P 500,&#8221; Panambur said.<\/p>\n<\/div>\n<div class=\"group\">\n<p>The set-it-and-forget-it S&amp;P 500 strategy was intended to provide broad market exposure. &#8220;That&#8217;s no longer the case,&#8221; DeMassa said.<\/p>\n<p>As investors seek to diversify, it is important to pay attention to the holdings of each of the funds they own, he said.<\/p>\n<p>If a portfolio has funds tracking both the S&amp;P 500 and Vanguard Growth indexes, for example, the exposure to large-cap technology names will be increased rather than limited, he said.<\/p>\n<\/div>\n<\/div>\n<p><a href=\"https:\/\/www.cnbc.com\/2025\/10\/02\/sp-500-set-it-and-forget-it-strategy.html\" target=\"_blank\" rel=\"noopener\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Trevor Williams | DigitalVision | Getty Images The S&amp;P 500 index closed at a new all-time high on Wednesday amid a federal government shutdown. It rose to a new intraday high early Thursday. Prior to that, the index \u2014 which is focused on large-cap U.S. equities \u2014 had risen almost 90% since the equity bull<\/p>\n","protected":false},"author":1,"featured_media":21385,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[196],"tags":[167,442,1517,3797,1142],"class_list":{"0":"post-21384","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-finance-news","8":"tag-due","9":"tag-experts","10":"tag-rethink","11":"tag-setitandforgetit","12":"tag-strategy"},"_links":{"self":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/21384","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=21384"}],"version-history":[{"count":0,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/21384\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/media\/21385"}],"wp:attachment":[{"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=21384"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=21384"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=21384"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}