Why pay higher active fees for all this uncertainty and potential disappointment when you could instead
just buy an index fund and lock in the market's (fee - adjusted) return?
Frequently, passive
investors buy index funds for tactical rather than strategic reasons, meaning they expect to move in and out of positions quickly.
She also
bought some index funds in her brokerage account totaling $ 1,100 and managed to add $ 500 to her high - yield savings accounts.
And if no active fund can outperform, then it makes sense to
simply buy an index fund based on that particular benchmark.
Anyone
who buys an index fund can instantly obtain near - market returns, and indeed, he or she will beat most professional managers after costs.
Personally I'm not interested in individual bonds — I'd
rather buy an index fund or ETF that buys the types of bonds I want.
Why pay higher active fees for all this uncertainty and potential disappointment when you could instead
just buy an index fund and lock in the market's (fee - adjusted) return?
Investors buy index funds and index - linked ETFs under the assumption that they will mimic the price appreciation they expect for the underlying commodities.
Then buy index funds, because their superior performance, in relation to other funds, looks likely to persist for the long term.
Buffett recommends
buying index funds as a way to get steady returns, and avoiding having to pick stocks, he tells CNBC's «On the Money.»
As for the lower than expected return, it's no different
from buying an index fund, say an S&P 500 fund that never lives up to its name.
I don't want to try to «time» the market
before buying index funds because I know it always goes up eventually, but I'd love to have less debt on the house, too.
I will probably continue to add dividend stocks and reinvest the dividends, but I may also
start buying index funds while they're low.
WE DO N'T LIKE: Like many T. Rowe funds, a bit
like buying an index fund with a value slant, or an index with the most over-valued stocks removed.
You wouldn't want to
buy an index fund which only covers forestry companies when you actually wanted a broad - based index funds covering all the larger companies in the US.
If you are
considering buying an index fund that tracks the S&P 500, compare its long - term performance to actively managed funds that invest in U.S. large cap stocks.
It's true you can
only buy index funds from the Money Market within your RESP but they can link the money market to any bank account you want.
An alternative is to
buy an index fund on which dividends are not distributed, but are automatically reinvested instead.
When you are
mindlessly buying a index fund, mutual fund, or a set list of dividend stocks on a list with every paycheck are you really an investor, especially if you consistently underperform?
When compared to the benchmark averages (sometimes referred to «Lipper Averages «-RRB-, more than 60 % of actively managed stock mutual funds fail to outperform their segment indexes (in other words, if a mutual fund targets the oil and gas industry, you'll do better just
buying an index fund targeting the entire oil and gas industry rather than buying an actively managed mutual fund that targeted only the «best» companies within the oil and gas industry).
I think that the Bogle example is taken a bit out of context — Bogle is not saying buy individual stocks because ETFs are too easy to trade, he's
saying buy index funds (which have trading limits) instead of ETFs.
Most of the people here are talking
about buying an index fund or funds, so there's no real way that stock buybacks by individual companies are going to be a very useful indicator of much of anything in that context.
Also, just to clarify, if someone
did buy an index fund 10 years ago and just held it, they actually would have done quite a bit better than breaking even, provided the dividends were reinvested (which is usually the case).
Notes about this list: 1) You can
just buy index funds directly from an mutual fund company that wants direct relationships with the investing public.