Question and answer about holding only the S&P 500 index in your portfolio

Ben Carlson


On June 3, 2022, from Lance McIntosh DDS, Prescott ON, Canada

You provided a link to Ben Carlson’s blog last year and I have been enjoying his site and podcasts since then.  Thanks for that.

The link below will take you to his latest post.  It challenges the idea of holding only the S&P 500 index in your portfolio and makes a case for more diversification.  Thoughts?

Our answer

Investors can get a lot of useful information from Ben Carlson’s blogs.

Keep in mind that Carlson’s ultimate objective is to get clients whose portfolios his company, Wealth Simple, can manage.

Without question, there is a legitimate place for professional money management for investors not interested in doing it themselves, for widows and orphans, for those who are afraid to look after a large sum they might get from selling a business, and so on.

Investors don’t need to look very far to find a great many posts dealing with the negative side of passive index investing. All of these posts are designed to get investors to connect with a manager.

SPIVA has convincingly shown that over 90% of actively managed funds have underperformed the S&P 500 over a market cycle.

Warren Buffett, one of the most successful investors ever, wants the money that he is leaving to his widow to be invested in a passive index fund and cash or near-cash.

If that approach to investing is good enough f0r Buffett, should it not be good enough for any of us?

With the habits of the Monday Morning Program, luck hardly matters.

Good luck!

Dr. Milan Somborac

The Monday Morning Millionaire Program supports do-it-yourself (DIY) investors which I have been for over 50 years. About my team and me