Invest £ 750 in the S&P 500 a year ago would be worth so much

He S&P 500It started 2025, where 2024 came out, moving higher! The new records in January mean that some investors think that the demonstration of the last two years could have legs to continue. If an investor had this thought at the same time last year and had put £ 750 in a trackers fund, this is what would be worth today.

Reviewing the profits

The S&P 500 currently at 6,052 points. This time last year, it was 4,905 points. This marks an impressive gain of 23.4% in the 52 -week section. This means that the £ 750 would be worth £ 925.50. I must keep in mind that this is the unrealized gain as we are. If an investor owned the trackers fund, he would only realize the income if sold.

At first glance, this is a great percentage gain. Not only is it a positive return, but it is also considerable! But the real question is how it compares with other options that would have been considered for the investor in January 2024?

They could have approached home and choose a trackers fund in the Ftse 100. In that case, the investor would increase by 12.9%. So, putting money in the United States stock market would clearly have been a better movement.

Active versus passive

However, in terms of selection of active actions versus a passive tracker, there are some differences. If they had chosen a member of the 'magnificent 7', the return could be much larger. For example, NvidiaThe stock increased 88% during the same period of time. TeslaHe has doubled!

Of course, I have to be careful when making these comparisons. Although these are popular actions, it is equally possible for the investor to bought another company that lost money.

Looking to the future

It is true that an S&P 500 tracker could work well this year again. But I think investors could find more value in being selective. For example, they could consider adding American Express (NYSE: AXP). The load card and the financial service provider have experienced a 57% leap in the price of the shares during the past year.

I think the business could work well this year, with the latest quarterly results earlier this month that show a 12% jump in net income versus the same period last year. Income increases, fed by “Our Premium client base, particularly with Millennial and Gen Z consumers.”

Also remember that even if interest rates fall, the business is not as affected as banks. This is because a significant part of its income from the rates and loans of the card instead of only deposits.

However, a risk is that if we see a recession of the United States or a general economic pause, it could reach American Express. A deceleration in consumer spending would cause transaction volumes to fall.

Ultimately, I believe that actions such as American Express could be considered as part of a diversified portfolio instead of only a passive tracker.