Quote:
Originally posted by hershie
i like to keep up with all the biz mags (Forbes, Fortune...) and all I can say is that the "rules of the road" you state come from another time and place and do not necessarily apply going forward. I am not necessarily disagreeing, but there are dozens of smarter people then I who have written that the time of the broad index funds outperforming the actively managed ones is over and is an illusion of an outperforming stockmarket where the tide lifts all boats - but in this kind of a climate - the indexes are weighed down by the relative size of a few large companies that can be lond term dogs and weigh down the entire index. So, what to do. I know not. I just don't trust accepted wisdom any longer.
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Just how have the "rules of the road" changed?
This is the same crap that people said during the depression. My grandfater listened to them, and put all his money in EE bonds. My grandmother (his wife), a woman who didn't have a job, didn't have her own money, didn't listen. She scrimped and saved a little here and a little there, and invested it all in stocks (about $5000 total). Who do you think left my brother and I a nice big chunk of stock worth a whole lot of money? (I would never advise anyone to put all their money in just one or two stocks, but they didn't have index funds back then) Who do you think left us with a whole lot less even though he invested TONS more than she did?
My mom used to be a stockbroker (retired), 2 of my brothers manage bond funds, and one of my brothers is an analyst. When I had money that I wanted to start investing, I went to each of them separately and asked their opinion. Each and every one of the said "Vanguard total stock market index fund."
The rules of the road haven't changed, you just don't have enough experience with the market to know that people are ALWAYS saying that the rules of the road have changed.
Karen