Can invest $ 25,000 in the S&P 500 today and detention for 25 years will make you rich?

• Buying and holding strategy can be a great way to develop your portfolio while avoiding the temptation to pursue trends and risk stocks.

• The S&P 500 is recorded maximums, and although it is a historically average double-digit return, investors may want to prepare for the possibility of a lower return in the future.

• If you don’t think you are about to achieve your investment goals, you may want to consider investing more money or focusing on growth stocks.

• 10 shares we like better than SPDR S&P 500 ETF Trust ›

Not only years, but also decades, tracking S&P 500 was a reliable way to generate significant stock profits. As the index tracks the best shares on US markets, it offers a high low risk to ensure that you are positioned for long-term growth.

But what if you invested a one -off amount of $ 25,000 in a stock market (ETF) fund that tracks the S&P 500 as SPDR S&P 500 ETF (Freshly removed: spy)And you just behave for 25 years? Can this be enough to make you rich and allow you to retire comfortably? Let’s look.

Buying and Hold Strategy can be a good way to ensure that your wallet is increasing in value. Sometimes just leaving your portfolio can be the best thing you can do for your future. The temptation to pursue the latest trends or hot stocks can do more harm than the benefit and derail your investment goals and goals.

If you have a variety of portfolio or if you are invested in the SPDR S&P 500 ETF, the Set-IT-IT-Orget-IT approach can be great to consider unfolding. Over time, your investment must increase, although there is no guarantee that the shares will increase or increase when you need money. The variable that may have the most significant effect on your overall return is, unfortunately, the one that is also almost impossible to predict: your average annual return.

And with the S&P 500 around the maximums of all time, it may be reasonable to assume that its average return from here on it can tend to a slightly lower than its historical average of about 10%. Here’s how an investment of $ 25,000 in S&P 500 ETF can look like a period of 25 years if the average annual return is between 7% and 9%.

Calculations and table by author.

The $ 25,000 investment will grow significantly over the years with this scenario, but with a potential below average return, you are unlikely to find yourself a boat with money to be considered rich or enough to retire in 25 years. Your investment can increase to more than a few hundred thousand dollars and increase your overall financial situation, but if your goal is to complete wealthy, ie. Having a portfolio worth over $ 1 million, then this strategy may not be enough to get you there.