Does the S & P always go up, over the long term ?

[orbit23]

One of the reasons why it's always going up is because they KEEP PRINTING MONEY.

The stocks are valued against the DOLLAR. As money perpetually loses it's value, stocks naturally go up.

'Black swan' events, which happen every so often usually wipe out all these "up only" strategies. So it might work for 10 years, but then you lose it all in a single event.

The environment keeps changing. You need to accustom the strategy depending on the environment. Nothing works all the time.

 

[DevBru]

It is a momentum etf, means if the biggest names (AAPL & co.) face a problem like serious foreign competition the index will plunge. Many of the leaders have a form of monopoly. If there were alternatives to MAC OS, Google/Youtube, Windows etc with high adoption rates the ETF would plunge.

The big ones would probably just buy those companies before they become a big competitor, profiting even more.

Also, most of them do have serious competition, they are just doing it better.

To answer OPs question, yes, over time it should goup.
However this only works if you hold long enough.

If you buy now and hold 30 years you are almost guaranteed a return, over 5 years for example not.

 

[mason macgregorson]

If conventional wisdom is true, wouldn’t that be easy to rely/dictate your trading strategy based on this? Eg - options strategies, leverage, etc… just doing some simplified thinking here, curious to the rebuttals.

S&P stocks are changed all the time; Walmart, Wendy's, OfficeMax, Twitter & Tesla were dropped; between January 1, 1963 and December 31, 2014, 1,186 index components were replaced by other components (i.e. better indices), how cold it no go up?

 

[mason macgregorson]

The big ones would probably just buy those companies before they become a big competitor, profiting even more.

Also, most of them do have serious competition, they are just doing it better.

To answer OPs question, yes, over time it should goup.
However this only works if you hold long enough.

If you buy now and hold 30 years you are almost guaranteed a return, over 5 years for example not.

if your stock is de-listed, you are guaranteed nothing.

 

[MKTrader]

While the S&P 500 wasn't around during the 1929 crash, it took the Dow about 25 years to reach an all-time high again after the crash and Great Depression. Japan's Nikkei peaked in 1989 and is still below that level 33 years later.

So the best answer is the S&P 500 has always recovered from crashes in the past, but there's no guaranty for the future.

 

[2rosy]

https://www.officialdata.org/us/stocks/s-p-500/1926

 

[MKTrader]

https://www.officialdata.org/us/stocks/s-p-500/1926

They obviously used some sort of S&P 500 proxy.
What Is the History of the S&P 500? (investopedia.com)

 

[DevBru]

if your stock is de-listed, you are guaranteed nothing.

This thread is about the index, not individual stocks.

 

[mason macgregorson]

While the S&P 500 wasn't around during the 1929 crash, it took the Dow about 25 years to reach an all-time high again after the crash and Great Depression. Japan's Nikkei peaked in 1989 and is still below that level 33 years later.

So the best answer is the S&P 500 has always recovered from crashes in the past, but there's no guaranty for the future.

S&P 500 has always recovered from crashes in the past.... by dumping weak stocks and replacing with most robust stronger ones.

 

[MKTrader]

S&P 500 has always recovered from crashes in the past.... by dumping weak stocks and replacing with most robust stronger ones.

Eh, that relies on stock picking and isn't guaranteed to work in a situation like the Nikkei is in