In recent years, the name S&P 500 has become widely recognized as a dream index offering high returns, where investing almost guarantees profit, attracting many new investors ready to put their money in.
The S&P 500, short for Standard & Poor's 500, is a stock market index measuring the performance of 500 large publicly traded companies listed on U.S. stock exchanges, including the New York Stock Exchange (NYSE) and Nasdaq.
This index represents about 80% of the total U.S. stock market capitalization, comprising companies from diverse industries such as technology (Apple, Microsoft), finance (JPMorgan Chase), and consumer goods (Amazon). Companies are selected based on market capitalization, liquidity, and consistent profitability.
Investing in the S&P 500 thus diversifies risk across leading companies that have already been quality-screened, effectively combining the "top players in one place."
A common question is whether it is truly suitable for beginner investors, such as students.
The answer is yes, provided that they thoroughly study and understand all the conditions involved.
However, the S&P 500 remains a 100% equity investment with high volatility. During economic downturns or rising interest rates, the value of investments in individual companies may decline. Therefore, such investment should be approached as a long-term commitment, not a short-term speculative play.
Direct investment in foreign ETFs
This involves opening an account with brokers offering foreign stock trading, such as Dime, InnovestX, or Webull, to purchase ETFs listed on U.S. stock exchanges directly, like VOO or IVV. The advantage is lower management fees compared to Thai mutual funds.
Investing through Thai mutual funds
This is the most convenient method for beginners. Thai asset management companies invest funds in foreign core funds that track the S&P 500 index. This option allows starting with a small amount, but investors should carefully study the fees and investment policies detailed in the prospectus.
Investing through Depositary Receipts (DR or DRx)
These financial instruments enable investors to buy S&P 500 shares on the Thai stock exchange using Thai baht and existing Thai brokerage accounts without currency exchange. They provide benefits equivalent to direct foreign investment.
Ultimately, investing in the S&P 500 is like investing in any asset that carries risk and requires understanding and disciplined management, which will help achieve financial freedom goals.
Read personal finance and financial planning news with Thairath Money to help you "achieve good finances and a good life."https://www.thairath.co.th/money/personal_finance