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It's almost entirely about paying less in fund fees and aiming to be 'average'. I.E. get the return of the market rather than trying to beat it. Think of it as
by kspaans 11y ago
It's almost entirely about paying less in fund fees and aiming to be 'average'. I.E. get the return of the market rather than trying to beat it. Think of it as 'passive' investing rather than index investing.
EDIT: But yes, we don't know whether one can assume "The S&P500 will average 10% per year for EVARRRRR!!!1".
- gburt 11y agoI'm not the OP or the grandparent post, but I wonder what happens if a significant portion of the market starts indexing? My gut is that there are strong incentives against that: as more people start indexing, the gains from not indexing become more diverse.
- debacle 11y agoOn the same token, more indexing will insulate losses by creating an implicit demand based on market cap.