Posts Tagged ‘worst case scenario’

Index funds cannot go to zero ?

Index funds cannot go to zero ? Am I right ? e.g. take the S&P 500 ETF index for SPY.

There are 500 stocks in SPY. Should one stock declares bankruptcy or gets de-listed, it is removed from the index fund SPY and a new stock will be added.

So I think even in a bearish market, the price value of SPY or any index funds including Dow Jones, Hengseng, Nekki, etc will never have a price value of zero.

Should any stock(s) in anyone of these index funds goes belly up, the stock(s) just gets removed or de-listed from the index and a new stock will be added.

Am I right ? Or am I missing anything ?

Even if we have the worst case scenario similar or more devastating than the 1929 market crash, the price of any Index Funds cannot go
to zero value.

Please comment and give me your insight.

Thanks in advance


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What is the typical return of mutual funds?

What yearly rate can you expect in a low return mutual fund? How about a high return mutual fund?

How much can you lose?

What is the worst case scenario of investing in mutual funds (besides the bank closing down and run away)?


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