Should You Just Have an S&P500 Fund?

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Should You Just Have an S&P500 Fund?
 
Is your managed plan worth the fees? Are you at greater risk than you realize? Are you underperforming the S&P500?
 
Most managed plans do what the markets do, only 1.5-2% lower due to the fees ($15,000-$20,000 in fees per million dollars per year). If you were focused on a lot of older companies or a Dow Jones Industrial Average index fund, your portfolio would have performed far lower than the S&P500 – and dismally beneath a diversified plan that included hot industries and growth.

How can you tell how well you did? Simply ask for a chart of your return compared to the S&P500 over the last three, five, and 20 years. If you are shadowing the market, there are a number of concerns you should be aware of, including the fact that you’re paying 1.5-2.0% annually for something that you could get almost free. (Many online discount brokerages do not charge trading fees at this time.) If all you are doing is shadowing the market, then you can have all those companies that your broker-salesman is trading in one easy fund and be just as diversified. FYI: a professional analyst would be tasked with less than a dozen companies. A hundred or more companies is impossible to keep track of even if your account was being managed by the minute, which it isn’t.
 
The total return of the S&P 500 between 2023 and 2025 was 86.11%. How much more are you worth today than you were at the end of 2022? Has your plan almost doubled in value?
 
The main things that I’ll discuss in this blog are performance and protection. We want both. As we get closer to retirement, we can’t afford to have too much of our money riding on the Wall Street rollercoaster. The placating platitude that many of us receive that we should just sit on our hands during corrections, bear markets, and recessions doesn’t work in the real world. If we lose half of our wealth, our FICO score plunges, the interest rates that we’ll have to pay to borrow skyrocket, we might have trouble paying our bills and we could even be at risk of losing our home. This is not what the Whales of Wall Street do.
 
Investing is easy when you adopt a time-proven system. There are a few foundational rules. Everybody wants the value of their stocks to go up. In a downturn, nobody wants to lose. Both performance and protection are important, as is income. However, in today’s Debt World, people are getting sold into some very risky money losing, illiquid “safe” assets in the name of earning income. I’ll talk about that after we discuss protection and performance. You can also learn more about Safe, Income-Producing Assets with No Paper Losses in the resources directly below.
 
Bond and Fixed Income Without Paper Losses Masterclass (Oct. 2025). Receive access to the recording when you register for the Spring Financial Freedom Retreat. (You’ll want to attend the retreat before watching the masterclass.)
 
The Venus Fly Trap of Private Credit Funds
 
Should You Have a Managed Portfolio? (There are a few important and true cautionary tales included in this blog.)

(Click on the blue-highlighted words to access additional information.)
 
Here are the main topics of this blog.
 
Performance
Rebalancing
Protection
Income
21st Century Recessions
 
Here is more information on each point.
 
Performance
As I mentioned above, many people could beat the performance of their managed plan with a simple S&P500 index fund. It offers more gains with far lower fees. However, as you can see in the chart above, if you are only doing the S&P500, and are not leaning into some hot industries, you’re missing out on the incredible performance of silver, Peru, the Magnificent 7 and clean energy.
 
Every year, what’s hot and what is safe changes. Over the long-term, small caps outperform large caps. (That hasn’t been the case over the last decade.) If you didn’t have growth in the most recent up cycle, you were really missing out on the performance of the Magnificent 7. Silver, Peru, technology (including AI and cybersecurity) and clean energy (four of the hot slices mentioned in our sample pie charts at our Financial Freedom Retreat) were the superstars of 2025.
 
Rebalancing
Rebalancing at least once a year, preferably 1-3 times a year, ensures that you remain properly protected and diversified. It also encourages you to capture gains, and to buy low when stocks go down. In other words, using our pie chart strategy, we have a buy low, sell high plan on autopilot that prompts us to do what we’re supposed to do. This system takes the emotions out of investing and is very easy to self-direct.
 
Even if you have a managed plan, it’s important that you are adhering to a properly protected, age-appropriate, diversified, plan that is rebalanced regularly to ensure that you are staying within the proper risk/reward parameters. Of course, if you only have 10 funds (which is all you need), you don’t necessarily need a money manager. Most people would be a lot more diversified with the 10 funds mentioned in our sample pie charts than they are in a managed plan, which tends to be concentrated on large caps. Either way, be the boss of your money. Your financial advisor works for you.
 
Protection
As we get older, we can’t afford to have as much at risk. Having exposure to growth and hot industries can keep our at-risk side earning above market gains. At the same time, we can earn 3.5-3.9% safely without any losses, which also secures our portfolio. In downturns, it is the side that is protected from losses that’s going to keep us happy and fiscally strong.
 
Buy and hope only works when the markets go up. When the markets go down, and especially when they go down like a normal recession does – which hasn’t happened since 2009 – we could lose half of our wealth. For many of us who are hoping to earn some income, the amount that we can earn income on can be cut in half, if we haven’t properly protected our assets from corrections, bear markets and recessions.
 
On the other side, if we are 50 and we’re keeping 50% safe, a downturn of 50% or more in stocks is not going to cut our portfolio in half. Many people who used our strategy in the Great Recession earned gains, while those around them lost more than half of their wealth.
 

If there are a lot of economic storms on the horizon, and there are plenty in today’s world, including war, elevated share prices and outlandish debt, you might even act a little older than you are, overweighting more safe.
 
It’s important to remember that most people don’t buy low because they can’t. When you lose half of your wealth, you might be struggling to pay your bills and to keep your home. You are not going to be in a position to buy stocks for a bargain or purchase an affordable home. Only those who have liquidity are in a position to take advantage of great prices when the economy struggles for everyone else.
 
Income
A 3.9% return on $1 million is $39,000 every year. I want to stress that paper losses are far more problematic than the salesperson is telling us. High-yield bonds and above-market dividend-paying stocks are also high-risk. If the company gets into trouble, they may cut the dividend without warning. A gap down in share price occurs before we (or our money manager) can do anything to protect our principal.
 
Our sample fixed income strategies have been enjoying a safe, competitive return since 2009 with no paper losses. It’s not difficult to do this. It’s just tricky. Many broker-salesmen are compensated and rewarded more when they sell higher-risk assets.
 
As I mentioned above, I hosted a Bond and Fixed Income Without Paper Losses masterclass a few months ago. Register for the Spring Financial Freedom Retreat, and we would be happy to provide you access to the recording of that. We spend one full day on What’s Safe at the retreat to lay the foundation for what you will need for the Bond masterclass.
 
21st Century Recessions
The Dow Jones Industrial Average dropped 55% in the Great Recession and took about six years to recover. You don’t want to spend half of the bull market earning back losses. The NASDAQ Composite Index plunged 78% in the Dot Com Recession. It didn’t return to its March 2000 highs until 2016. That’s a 16-year recovery period.
 
Since 2009, the trajectory for stocks has been up. There have been brief episodes where they went down. We had a correction that almost became a bear last April 2025. We had a big scare in the pandemic when the S&P500 dropped almost 38% in less than a month. However, we printed up $4.6 trillion, so that we wouldn’t have a recession of note. The concern was that we could enter a Great Depression without that level of financial engineering. The result was the shortest recession in history, and a very quick recovery (by August 2020). That is not normal, however.
 
Even after losing -19.44% in the S&P 500 and -33% in the NASDAQ Composite Index in 2022, everything recovered and came up roses.

Source: MSN.com. (c) Microsoft. Used with permission.

However, it’s hard to watch your money drop that much without getting disillusioned and wanting a new money manager or wealth plan – unless you’ve kept the proper amount safe. (We received many love letters in the pandemic.) Imagine a million dollars dropping to just $330,000, as a Bitcoin or Tesla investor would have endured during 2022.
 
Again, regular rebalancing and an age-appropriate, diversified plan positions and prompts us to be on the right side of the trade. Our emotions are more in check when our wealth is stable.
 
Bottom Line
If you want to set it and forget about it then just keep a percent equal to your age safe and the rest in an S&P500 fund. That is assuming you want to have all your wealth plan betting on the U.S. We are using value replacement country funds, which offer increased diversification in countries with lower debt to GDP. (Click to read my blog about that.)

Rebalance at least once a year to keep the plan age appropriate.

In a Debt World, getting safe is tricky. It’s not difficult, but it is tricky. We must know basic life math and take ownership of our wealth. If you’d like an unbiased 2nd opinion (I don’t sell financial products) or personalized education, I offer that in my private coaching. You can read about this time-proven system, which is enthusiastically recommended by Nobel Prize winning economist Gary S. Becker, in my bestselling books or learn and implement it at our Financial Freedom Retreats.

If you are concerned about the massive amount of debt in the United States, there are ways to add performance and reduce risk through a simple, easy diversified plan that keeps enough safe. Having blind faith that somebody else is navigating all of this for you could prove to be a very bad bet, as it often is in recessions. Self-directing your own easy plan, or making sure that your managed plan is well-designed, will keep you achieving your performance goals, while protecting your principal. It's important to do this before the recession. As you can see in the charts below, if you wait for the headlines, it's too late. 

Are you aware that the hot funds we've been featuring in our sample pie charts and retreats performed at the top of Wall Street in 2025? Silver tripled. Peru (copper) was on fire with over 100% gains. Even clean energy scored 55%... 

Why not treat yourself to the gift of financial freedom to create a New Year, New Me in 2026?
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Register now to join us at our online Financial Freedom Retreat April 24-26, 2026 where you'll learn how to protect your wealth, save thousands annually in your budget, invest in hot industries like AI, gold, crypto and more, and how to be in the best seat during our volatile Debt World. Register with friends and family to receive the best price. (Ask for access to a recording of our Real Estate, Bond or Rebalancing masterclass as our gift to you.) Email [email protected] to learn more and register now.

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Request testimonials at [email protected]. You can also view some on the flyer page of the retreat. 

Learn how to:

* Invest in hot industries, such as cryptocurrency, Nvidia, artificial intelligence, and quantum computing,
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* Easy and efficacious nest egg strategies,
* Get hot and diversified (including in artificial intelligence, quantum computing and crypto),
* Evaluate stocks,
* Avoid capital gains and financial predators,
* Keep an age-appropriate amount safe, and,
* Know what's safe in a Debt World.

Yes, it's a complete money makeover. 
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Email [email protected] or call 310-430-2397 to learn more and register. Learn the 15+ things you'll master and read testimonials in the flyer on the home page at NataliePace.com. ​

"Ten minutes into the first day I was already much smarter about investing than I ever thought I would be in my life and I knew I was in exactly the right place at this retreat. I am amazed at how EASY and FUN it is to make my money work for me and those I love. I think this kind of information should be compulsory in schools. I wish I'd learned this sooner." CM
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"Many people, including educated men and women, often get into trouble when they 
neglect to follow simple and fundamental rules of the type provided [by Natalie]. 
This is why I recommend them with enthusiasm." 
Professor Gary S. Becker. Dr. Becker won the 1992 Nobel Prize in economics for his theories on human capital

"College students need this information before they get their first credit card. Young adults need it before they buy their first home. Empty nesters can use the information to downsize to a sustainable lifestyle, before they get into trouble." 
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If you’d like an unbiased 2nd opinion on your current wealth plan, email [email protected] for pricing and information.
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Click through to the flyer to learn more. Call 310-430-2397 or email [email protected] for pricing, additional information and to register. Register with friends and family to receive the best price. Teens and college students can attend for just $99.

Join us for our Restormel Royal Immersive Adventure Retreat. Spring Equinox 2027. Email [email protected] to learn more. Click for testimonials, pricing, hours & details. Register now to receive the best price, the best room and four private, prosperity coaching sessions. There are only 4 rooms available. This retreat includes an all-access pass to all of our online training for a full year for two. Considering the perks, you're receiving a 65% discount to learn the life math that we all should have received in high school, and the room is free! Email [email protected] to learn more. The best rooms at the 2025 retreat were sold out in 2024! Yes, it's a great idea to register and start transforming our lives now.

​Natalie Wynne Pace is an Advocate for Sustainability Financial Literacy & Women's Empowerment. Natalie is the bestselling author of The ABCs of Money (6th edition) and The Power of 8 Billion: It's Up to Us, and is the co-creator of the Earth Gratitude Project. She has been ranked as a No. 1 stock picker, above over 835 A-list pundits, by an independent tracking agency (TipsTraders). Her book The ABCs of Money remained at or near the #1 Investing Basics e-book on Amazon for over 3 years (in its vertical), with over 120,000 downloads and a mean 5-star ranking. The 6th edition of The ABCs of Money and the 2nd edition of The ABCs of Money for College are the most recent releases of these books. Follow her on Instagram. 
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Natalie Pace's easy as a pie chart nest egg strategies earned gains in the last two recessions and have outperformed the bull markets in between. That is why her Investor Educational Retreats, books and private coaching are enthusiastically recommended by Nobel Prize winning economist Gary S. Becker, TD AMERITRADE chairman Joe Moglia, Kay Koplovitz and many Main Street investors who have transformed their lives using her Thrive Budget and investing strategies. Click to view a video testimonial from Nilo Bolden.​​

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Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly-traded companies, funds or projects mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect an age-appropriate, diversified wealth plan, which has been designed strategically, with the assistance of financial professionals who are familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge, patience and diversified strategy.  
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Information has been obtained from sources believed to be reliable. However, NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument.