S&P 500 index investors have been rewarded so far in 2025. Why experts say it may be time to diversify

• Berkshire Hathaway Chairman Warren Buffett or Vanguard founder Jack Bogle have both said a long-term investment strategy in the S&P 500 index can reap big gains.
• Yet that “set-it-and-forget-it” approach may no longer work for today’s investors, particularly if they have a shorter time horizon, according to Morgan Stanley.
• While the index is up year to date, here’s why some experts say it may be time to diversify.

The S&P 500 index has bounced back from its April lows.

Yet experts say investors would be wise to watch the risks before pursuing an investment strategy concentrated in the large-cap company-focused S&P 500 index, which represents about 80% of market capitalization.

″Our advice for people who are looking at their performance on a one-year or three-year horizon is no, we don’t think that the set-it-and-forget-it, S&P 500-only strategy is the right strategy,” said Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management.

Source: https://www.cnbc.com/2025/08/26/sp-500-index-diversify.html