Once again, I thought SPY couldn’t drop any lower, so I bought 12 more shares to pretty much spend the rest of my cash in my brokerage account. Now I have 112 shares of SPY, and I got the last 12 shares at $133.35 per share on March 3rd. Since then the price has dropped to $128.00, but I’m out of cash that I have available to invest, otherwise I would buy up some more.
The price to earnings multiple for the top 500 U.S. companies represented by SPY is now at about 13.7, which seems like a good value to me, because together they are returning 7.3% on equity, plus you benefit from any growth of these companies. So I expect at least a ten percent annualized return from SPY over the next couple of years.