The S&P 500 was at $1944.41 on September 1 2015, and grew to $2740.37 by November 1 2018 (a few days ago) according to http://www.multpl.com/s-p-500-historical-prices/table/by-month. That means it got bigger by a factor of 1.409 over 38 months, so it grew at a rate of 11.4447 percent annually.
Over the same time period, the package of investments I have with a local financial company grew by a factor of 1.130, or 3.943 percent annually.
I like the idea of a S&P Index Fund as a very plain and mainstream way of investing, with a low expense ratio (Schwab charges 0.03% for example). I like what Warren Buffet has said about them. I understand that if I had put my money in that fund it would have grown at 11.4447 - 0.03 = 11.417 percent annually.
That’s correct, isn’t it?
So, am I basically practicing negligence or incompetence by leaving my funds where they are, instead of just putting the money into the Schwab S&P 500 Index Fund?
The package of investments I’m talking about is 1/3 of my total. It includes a range of risks. There are major fractions in individual stocks that the local company’s staff buys and sells, a couple different mutual funds, and an annuity. The local company has a sound history and online articles about them all seem positive. I also have a name brand 401K and an employee stock ownership program, each another 1/3 of my total, and both connected to my employer. The 401K is all stocks and so somewhat high risk, and the stock ownership program is quite high risk as it is all in one company and my remaining career prospects are also strongly tied to the same company. Better judgement on managing the risk level of my savings is probably in order, but it’s also hard to come by, as advisors always seem to have conflicts of interest (even when paid an outright fee rather than through commissions). I’m 61, have about 15 years salary saved, and anticipate retiring in 5 years and dying in about 24 years.
What say the wise Dopers?