I recently just opened a Roth IRA account and invested in S&P500 as a long term investment. Do you guys think this was a good idea? Or should there are better stocks out there for a long term?
Its a good idea if you want an easy way to diversify yourself and forget about it for 10yrs. The only possible problem here is that this market is looking toppy. While you should not be trying to time the market if you are a long term investor, there may be an opportunity to get much lower prices later this year.
I agree with Gil if you want something to just set it and forget it. But, if you don't mind at least doing a quarterly review I am a firm believer in dividend growth investing for both compounding reasons and reasonable price appreciation. Every study I have read on this method have produced superior results to the overall market over 10 to 20 year periods. Dividend Aristocrats are those stocks that have exceeded 25 years of not only paying dividends without cutting but have raised their dividends at least once every 4 quarters. They are the type of stocks that do not need frequent attention but should be reviewed quarterly. You simply choose a basket of stocks from the dividend aristocrats list that have yields over 2.5% (beats current inflation rate) and set with your broker to participate in dividend reinvestment program. Do a quarterly review. Dividend cuts should be rare if sticking to this list but if you get a cut sell the stock. If they don't cut but have gone over 4 quarters without raising sell the stock. Otherwise just hold and wait for the next dividend.
