of S&P500 It is often the benchmark that investors try to beat. And over the long term the broad index is producing his 10% return, so that's a good thing to aim for. Assuming an average return of 10% over 25 years, your investment will be worth nearly 11 times its original value. That would turn your $25,000 investment into nearly $275,000.
One way to outperform the index is to use the same types of stocks that are included in the S&P 500, with a particular focus on technology, a fast-growing sector.
Technology stocks are typically high-performing investments over the long term.
When you think of the world's most popular and successful stocks, you probably think of tech stocks. That's because the most valuable stocks are often focused on producing next-generation technology. That is the main reason investors want to invest in them and why they command a high premium. All trillion dollar stocks in Nasdaq They all have one thing in common. That means it's a tech stock.
You can also invest in small, promising tech stocks to maximize your profits off the fence, but these investments involve far more risk and uncertainty. As such, consistently outperforming the S&P 500 is no easy feat.
There is one fund that has outperformed the index in nine of the past 10 years. Technology Select Sector SPDR Fund (NYSEMKT: XLK).
S&P tech stocks have outperformed the index over the past decade
The Technology Select Sector SPDR Fund provides investors with exposure to high-tech stocks that are part of the S&P 500. This includes leading stocks such as: microsoft, apple, Nvidiaand many more.
And over the years, we've made big profits by focusing on that section of S&P. Here's how the fund performed compared to the broader S&P 500 index:
|
Year |
S&P500 return |
Technology Select Returns |
|---|---|---|
|
2023 |
24.2% |
54.7% |
|
2022 |
-19.4% |
-28.4% |
|
2021 |
26.9% |
33.7% |
|
2020 |
16.3% |
41.8% |
|
2019 |
28.9% |
47.9% |
|
2018 |
-6.2% |
-3.1% |
|
2017 |
19.4% |
32.2% |
|
2016 |
9.5% |
12.9% |
|
2015 |
-0.7% |
3.6% |
|
2014 |
11.4% |
15.7% |
Source: yCharts
The only downside for the S&P's tech sector over the past decade was 2022, when tech stocks struggled amid rising interest rates. But low valuations and the emergence and growing popularity of artificial intelligence have dispelled those concerns and investors are once again bullish on the technology. There are huge uncertainties regarding technology. It can be the worst place to invest when the economy is bad, but it can give you the best returns when the economy is good.
Is Technology Select Sector SPDR the best option for investors?
If you still have a lot of investment time left, it makes sense to invest heavily in technology. The Technology Select Sector SPDR Fund also provides excellent diversification and a way to profit from some of the world's safest and largest technology stocks. There may be better growth funds out there if there are certain areas of the economy you want to focus on more than others, but given the balance and stability this fund offers, this fund is mostly may be the best option for long-term investors. .
Should you invest $1,000 in Select Sector SPDR Trust – The Technology Select Sector SPDR Fund now?
Select Sector SPDR Trust – Technology Before purchasing shares of the Select Sector SPDR Fund, consider the following:
of Motley Fool Stock Advisor Our analyst team has identified what they believe Best 10 stocks What investors can buy right now… and Select Sector SPDR Trust – Technology Select Sector SPDR Fund was not among them. These 10 stocks have the potential to generate impressive returns over the next few years.
when to think about it Nvidia This list was created on April 15, 2005…if you invested $1,000 at the time of recommendation. you have $518,784!*
stock advisor provides investors with an easy-to-understand blueprint for success, including guidance on portfolio construction, regular updates from analysts, and two new stocks each month.of stock advisor For the service more than 4 times The resurgence of the S&P 500 since 2002*.
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David Jagielski has no position in any stocks mentioned. The Motley Fool has positions in and recommends Apple, Microsoft, and Nvidia. The Motley Fool recommends NASDAQ and recommends the following options: His January 2026 $395 long call on Microsoft and his January 2026 $405 short call on Microsoft. The Motley Fool has a disclosure policy.
This ETF has outperformed the S&P 500 in nine of the past 10 years.The original article was published by The Motley Fool
