Investing in the S&P 500 Is Still a Good Idea, but Here Are 2 Safer Ways to Do It

Core Insights - Investing in the S&P 500 has historically been a solid strategy for long-term returns through a buy-and-hold approach [1] - The S&P 500 index consists of 500 of the largest public U.S. companies, providing broad diversification, but is market-cap weighted, leading to concentration in larger companies [1][2] - The SPDR S&P 500 ETF (SPY) has significant concentration in its top three holdings, which may pose risks for investors concerned about potential declines in megacap tech stocks [2] Fund Analysis - The Invesco S&P 500 Revenue ETF (RWL) weights its holdings based on company revenues and limits individual stock weight to a maximum of 5%, providing a more balanced exposure [5] - The top three holdings in RWL are Amazon, Walmart, and Apple, which together account for just over 10% of the portfolio, making it a safer alternative to SPY [6] - The expense ratio for RWL is 0.39%, higher than SPY's 0.09%, which could impact long-term returns, but may be justified for risk-averse investors [6] Performance Comparison - Year-to-date, SPY has increased by approximately 17%, while RWL has risen by about 14%, indicating that RWL may offer more stability during potential market downturns [7] - Concerns exist regarding the S&P 500's record highs and the possibility of a market decline, emphasizing the importance of different weighting methods in ETFs [8]