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Don't get too concerned about S & P 500 Hitting 3000



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S & P 500 hits 3,000 for the first time ever July 10. And while there was a temporary increase in just a few hours, there was a big moment for watchers of this index. The moment was good news for investors, but not for the reason you might think.

The S&P 500 tip came at the same time as people expelled the Federal Reserve chair Jerome Powell's congressional testimony, indicating that the Fed would cut interest rates soon – perhaps even this month. It's a more conservative approach than the Fed has taken recently, having increased federal funds' interest rate nine times over three years. And many people are concerned that a recession is on their way.

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] So why did traders jump on this index? Ian Salisbury writes for money: "Stock market investors like low interest rates because they make it cheaper for US companies to borrow, increase business opportunities."

Fun for traders. But what about you, home-investor?

Wait, what's the S & P 500 again?

The Standard & Poors 500 Index measures the value of the 500 largest companies listed on the New York Stock Exchange. It's a way to take a quick look at the health of the stock market and the general economy, Investopedia explains. It is good to look at the market because it has 500 companies from all parts of the country and across industries. But the S&P 500 is not perfect. It's weighted on larger companies or those with market capitalization of over $ 10 billion (think Microsoft, Apple, Exxon Mobil, Johnson & Johnson).

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Don't change your investment strategy

Don't worry about this new milestone (which won't even be official to market closes with S & P 500 at 3000). Instead, if you are eager to invest in a diverse set of stocks this way, make sure you don't overpay in fees. When we mention low fee index funds, we usually talk about those with a spending ratio of 0.25% or less.

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Remember that how long your money is investing makes the biggest difference to your long-term outcome, not how you react to market fluctuations. While you should rebalance your portfolio annually, any changes you make when doing so should be based on your own risk tolerance, not regardless of the heights and downsides you've seen the market, endure recently.


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