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Is Indexing truly one of the best ways to invest?

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  • #1

    Is Indexing truly one of the best ways to invest?

    Is Indexing truly one of the best ways to invest?

    according to this article, it would seem so.
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    Could this be why a majority of our assets are in indexed funds?

    Could be!!
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  • #2
    Re: Is Indexing truly one of the best ways to invest?

    I guess I have my money in the right place.

    I do second guess it occassionally...but not enough to have moved the money around. I guess that proves I'm more of a passive investor.

    Show me the money!!!
    My other blog is Your Organized Friend.

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    • #3
      Re: Is Indexing truly one of the best ways to invest?

      I'm a huge indexer but I think there are a few exceptions. There's a handful of fund managers that have excellent long-term performance. I can see an argument to go with them -- they seem to have the right formula. Also small, managed funds that invest in stocks that are not well-known (microcaps, emerging markets) seem to do better than the equivalent indexes.

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      • #4
        Re: Is Indexing truly one of the best ways to invest?

        I did not start out with index funds. I went with american Century funds (then called Twentieth Century) because at the time, you could open with a very low minimum and your investments after that could be very small. I started several funds with only $50
        Later i switched to Index funds and most of our ira and roth ira money is in vanguard Index 500!

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        • #5
          Re: Is Indexing truly one of the best ways to invest?

          I'm 100% in index funds, and doing very well, thank you very much! I truly agree that it is one of the best ways to invest, if not the best way.

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          • #6
            Re: Is Indexing truly one of the best ways to invest?

            I think you could do quite well to go 100% index funds. I have index and actively managed funds, but I have a substantial broadly diversified portfolio and, as mentioned, active funds are better for certain sectors. But for the average investor, a total stock market index, a small company index, an international index and a bond index would make a fine portfolio.
            Steve

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            • #7
              Re: Is Indexing truly one of the best ways to invest?

              Anyone read the article in the latest Kiplinger's about an improved index fund that didn't buy just based on market cap (which is obviously what it does now).

              Basically these proponents of the improved system were saying that traditional indexes are inherently flawed because you're buying more of stocks that are going up and less of stocks that have just struggled, when you should probably be buying the stock that has struggled and is poised, and be selling the stock that has is still climbing and has nowhere to go in the future except down...

              That was the premise. I was intrigued. At any rate though, I'm invested in the Vanguard 2045 index.

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              • #8
                Re: Is Indexing truly one of the best ways to invest?

                Sometimes it makes sense sometimes no. We have a mixture and we rebalance once a year. My wifes 403b offers hardly any indexes so we go with well performing subfunds, you need top check morning star and see the rating and also check if a fund has a consistant percentage gain each year (cnbc or yahoo finance), with index funds you just keep up with the market. I do like bond indexes alot and the new mixed fund with a retirement year inmind like the T rowe 2020 fund.

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