Re:Ask HN: What do you automate in your life and work?
by joshuamorton on Monday October 28, 2019 @10:29AM
(#21377307)
> 1. It neglects dividends.
True, but if I replaced S&P500 with VTSMX (a Vanguard index fund, which got marginally higher than 50% returns over the same time period) would not.
> 2. The S&P 500 as presently constituted omits all the companies that were excluded during that time period (eg., went broke).
The current S&P 500 does, but watching the S&P500 index over time does not. And index funds generally rebalance to take these things into account.
As another user mentioned: knowing which companies are "good solid companies" is a trillion dollar industry. No simple strategy beats the market over the long term, other wise passive investors would all do it, and start beating the market.
True, but if I replaced S&P500 with VTSMX (a Vanguard index fund, which got marginally higher than 50% returns over the same time period) would not.
> 2. The S&P 500 as presently constituted omits all the companies that were excluded during that time period (eg., went broke).
The current S&P 500 does, but watching the S&P500 index over time does not. And index funds generally rebalance to take these things into account.
As another user mentioned: knowing which companies are "good solid companies" is a trillion dollar industry. No simple strategy beats the market over the long term, other wise passive investors would all do it, and start beating the market.