Why do I invest most of my money in S&P 500 index funds?

There are many index funds that track market indices. For example:

• The S&P 500 Index - Tracks the performance of 500 large companies listed on U.S. stock exchanges
• The JSE Top 40 Index - Represents the 40 largest companies by market capitalization listed on the Johannesburg Stock Exchange

Many famous investment experts, such as Warren Buffett, have said that most individual investors do not have the expertise to select companies that will grow significantly in the future. Therefore, these experts recommend that most individual investors should put their money into index funds that track the S&P 500 index. This is because the S&P 500 index has shown gradual but consistent growth over the very long term.

 

Here is a chart showing the value of the S&P 500 index over the past 30 years.