‘Rich BFF’ Says the S&P 500 Fund Isn’t as Diverse as You Think — Where To Invest Beyond That

<p>-

• 'Rich BFF' Says the S&P 500 Fund Isn't as Diverse as You Think — Where To Invest Beyond That</p>

<p>Vance CariagaAugust 16, 2025 at 9:04 PM</p>

<p>bymuratdeniz / iStock.com</p>

<p>If you invest in the stock market, then at least part of your money is probably in an S&P 500 index fund or with one of the companies comprising the S&P 500.</p>

<p>The index alone covers roughly 80% of available market capitalization, according to S&P Global. The companies that belong to it cover every industry and economic sector you can name. That's why most financial advisors recommend investing in the S&P 500 if you want maximum diversification.</p>

<p>Learn More: Robert Kiyosaki Is Dumping Gold and Silver — Here's What He's Buying Instead</p>

<p>Read Next: 8 Unusual Ways To Make Extra Money That Actually Work</p>

<p>But is that really the case? Maybe not, according to finance expert and ex-Wall Street trader Vivian Tu, aka "Your Rich BFF."</p>

<p>Trending Now: Suze Orman's Secret to a Wealthy Retirement--Have You Made This Money Move?</p>

<p>So What's Wrong With the S&P 500?</p>

<p>In a recent YouTube video, Tu acknowledged that the S&P 500 has "long been the benchmark" for the stock market, and the index fund that tracks it has been a "quick and easy way" to build a diversified portfolio.</p>

<p>But lately, she said, the S&P 500 has gotten "more and more concentrated" among only the biggest companies.</p>

<p>"Most people buying S&P 500 index funds are assuming they're buying a little piece of 500 different companies, hence the 500," Tu said. "And while that's sort of true, it turns out the top 10 largest companies account for about 40% of the index."</p>

<p>Check Out: Self-Made Millionaires Suggest 5 Stocks You Should Never Sell</p>

<p>Heavy on the 'Almond Joys'</p>

<p>Tu likened investing in the S&P 500 to a "mega bag" of Halloween candy. You assume the bag would have many different flavors — only to get home and find that half of them are Almond Joys.</p>

<p>"Right now, investing in the S&P 500 is in large part taking a bet on the Magnificent Seven tech stocks. Not perfect if your goal was to invest in a bunch of different stuff," Tu said.</p>

<p>She doesn't want to dissuade investors from having positions in the S&P 500. But she does recommend spreading your money around beyond the index.</p>

<p>Where To Put Your Money</p>

<p>To diversify your portfolio, Tu recommends index funds that track foreign markets. She also favors sector funds that focus on non-tech industries such as energy, industrials, healthcare, consumer and retail.</p>

<p>"And last but not least, look at funds that focus on small cap or mid-cap companies versus some of those ultra-large players," Tu said.</p>

<p>She's not the only one who recommends branching out from the S&P 500. AMG Wealth offered much the same advice in a blog titled "Diversification Requires Thinking Beyond the S&P 500 Index." In the blog, AMG advised spreading your money into a diverse mix of bonds, large- and small-cap funds, emerging markets, real estate and alternative investments.</p>

<p>If you're looking for funds that have outperformed the S&P 500, U.S. News listed five of them in an article published earlier this year. The funds cited by U.S. News are Invesco S&P 500 Momentum ETF, VanEck Semiconductor ETF, Grayscale Bitcoin Trust ETF, Invesco QQQ Trust and Roundhill Magnificent Seven ETF. All produced better 5- and 3-year returns than the S&P 500.</p>

<p>As Tu noted, a diversified portfolio is a good portfolio.</p>

<p>"In the same way I'm not buying just one stock, I'm not buying just one index fund either," she said.</p>

<p>More From GOBankingRates</p>

<p>6 Costco Products That Have the Most Customer Complaints</p>

<p>5 Ways Trump Signing the GENIUS Act Could Impact Retirees</p>

<p>5 Clever Ways Retirees Are Earning Up to $1K Per Month From Home</p>

<p>4 Low-Risk Ways To Build Your Savings in 2025</p>

<p>This article originally appeared on GOBankingRates.com: 'Rich BFF' Says the S&P 500 Fund Isn't as Diverse as You Think — Where To Invest Beyond That</p>

<a href="https://data852.click/5a32cd58501e613bf372/ee0a75caf0/?placementName=default" class="dirlink-1">Original Article on Source</a>

Source: "AOL Money"

Читать на сайте

---

Source: AsherMag

Full Article on Source: VOUX MAG

#LALifestyle #USCelebrities