[Video] Ultimate Guide to ETF Investing

In our “How to invest RM10,000” post, we shared the best way for people to invest is Exchange-Traded Fund (ETF), specifically the S&P500. Even Warren Buffett asked his wife to invest in the S&P500 after he dies.

This is the ultimate guide if you want to invest in S&P500 via ETF!

Part 1: What is ETF

ETF is a fund that you can buy from stock exchange, hence the name Exchange-Traded Fund.

Because we can buy ETF from stock exchange and don’t need to pay sales charge to agent, the fees are lower compared to all other funds, i.e. Unit Trust Funds, Mutual Funds etc.

Part 2: What is S&P500

S&P500 is an index that tracks the biggest 500 US Companies (by market cap) since 1957. In simple words, S&P500 = US market. So when people say US market is good or US market is bad, they are referring to S&P500.

The biggest 500 companies in the US change all the time, i.e. the top 500 companies in 2000 is different from the top 500 companies in 2024. This is very important because this is like a filtering system, only the best can continue to stay in the S&P500.

Fun fact: Tesla was only included in the S&P500 in December 2020.

So if you invest in S&P500, you are investing in the best 500 US Companies, including Apple, Nvidia, Microsoft, Meta (Facebook, Instagram and Whatsapp), Tesla etc.

Part 3: What makes S&P500 a good long-term investment?

This is the most important part of the whole post, please take note.

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