The best way to own common stocks is through an index fund.
--Warren Buffett
Here's the logic behind index funds, which aim simply to match the return of a market index: The average fund in any market will always earn that market's return (because in aggregate investors are the market) minus expenses. Since index funds match the market but have much smaller expenses than other funds, they will always beat the average fund in the long run. It's hard to argue with the math, and history bears it out (see the performance stat at right). Besides, if the Greatest Investor of Our Time believes that index funds are superior for most investors, shouldn't you?
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6. Average is the new best |  Everyone's got concerns when it comes to money, but some have fears that can really put a big hole in their financial future. Here's how to overcome five common ones. (more)  The answer has nothing to do with finding the single perfect stock or mutual fund. The key is changing your idea of what the 'right' investment really is. (more) |
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