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100% in the S&P 500 is not a sound investment strategy. The S&P is a weighted index so if you invest $500 you don't have $1 go to each of the 500 stocks in the index. You will have $7 in the largest then 6$ in the next few adn so on down the line.

It's worse than that. GE and Microsoft were 4% to 3.5% of the index (each) last time I checked. So, of the $500, MSFT and GE would be at $17 to $20.

The S&P500 can be the biggest chuck of your asset allocation if you're going for growth, i.e., accumlating assets (vs., say, protecting/withdrawing). However, that only gets you large-caps. You also need small cap US stocks, and international stocks, plus cash and/or bonds to be truly diversified.

I don't go for the "5% in real estate or emerging markets" idea, since that's just in the noise ratio. You have to double your 5% position to make up for a 10% change in your 50% position.
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