Quote:
Originally posted by hershie
In this kind of a market the past couple of years, a broad index mutual fund like Vanguards that track the S&P 500 or the Wishire 5000 may be the wrong thing to do. You need a sharp mutual fund manager who actively trades the account to cherry-pick the right stocks in a market that may move sideways for a few years still. IMO.
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Regular old market based index funds (S&P 500 funds, and broader funds like Vanguards Total Stock Market fund) beat 80%+ of actively managed funds.
The market as a whole invariably goes up longterm. If you invest for long term (like you should with stocks), the market's daily, weekly and even yearly ups and downs mean nothing. I check my stuff 4 times a year, and honestly it means nthing to me where it currently is.
Actively managed mutual funds suck with very few exceptions. Even if they do manage to outperform the market on a raw % gain basis, by the time you factor in expense ratios and taxes, you're behind the S&P 500 index funds actual monetary gains.
Doesn't mean everything you have should be in a broad index fund, but broad index funds are the safest, easiest way to make money longterm.
And yes...there are exceptions. I am aware of that. ;) As long as you have the right timeframe though, you can't go wrong with an index fund.