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I disagree. It's very unclear what strategy will work over the next 20 years. Many people are bullish on index funds because research has shown that they outper

by aml183 8y ago

I disagree. It's very unclear what strategy will work over the next 20 years. Many people are bullish on index funds because research has shown that they outperformed managed funds over the past 10-20 years. It doesn't mean they'll outperform over the next 20 years. Past results are no indication of future results.

nostromo 8y ago
> Many people are bullish on index funds because research has shown that they outperformed managed funds over the past 10-20 years. According to John Bogle, this has been true for over 100 years. His analysis goes back to 1900.
- aml183 8y ago
  You can't backtest a fund such as VTI. The issue is that these analysis don't take into factors such as volume. I'm sure if someone backtested $100MM investment in Bitcoin starting from 2010, the results would be spectacular, but we all know that buying pressure would've caused Bitcoin to skyrocket and the returns would be less than the backtested results. I personally tell people to invest in index funds if they don't understand investing, but it doesn't mean it will do better than other options. Index funds are only a recent phenomenon. The biggest issue with index funds at the moment is "group-think". If everyone in America is investing via index funds then when people need money, those same index funds will fall sharply. There is a valid line of thinking where one should avoid stocks with heavy exposure to index funds because those stocks will have the best returns during an equities downturn. http://theirrelevantinvestor.com/2017/08/31/today-in-market-history-the-first-index-fund/ http://theirrelevantinvestor.com/2017/08/31/today-in-market-...
  - chkdsk 8y ago
    You absolutely can backtest VTI. We have reliable historical market data of the total US stock market (what VTI is) going back to the late-1800s. Also, please tell me 1 of those better options? The link you posted seems to take the opposite view from what you expressed. Batnick is very pro index funds.
patejam 8y ago
Unless you have some kind of special insight, why would you not just go with the flows of the overall market and invest in index funds? Seems like a good default when all options are technically unknown.
deleted 8y ago
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chriogenix 8y ago
i second this opinion. past results are not indicative of future ones. The question is if you dont follow the passive ETF/index strategy what do you do? In that regard i suppose its better than doing nothing.

by aml183 8y ago

nostromo 8y ago

> Many people are bullish on index funds because research has shown that they outperformed managed funds over the past 10-20 years. According to John Bogle, this has been true for over 100 years. His analysis goes back to 1900.

aml183 8y ago
You can't backtest a fund such as VTI. The issue is that these analysis don't take into factors such as volume. I'm sure if someone backtested $100MM investment in Bitcoin starting from 2010, the results would be spectacular, but we all know that buying pressure would've caused Bitcoin to skyrocket and the returns would be less than the backtested results. I personally tell people to invest in index funds if they don't understand investing, but it doesn't mean it will do better than other options. Index funds are only a recent phenomenon. The biggest issue with index funds at the moment is "group-think". If everyone in America is investing via index funds then when people need money, those same index funds will fall sharply. There is a valid line of thinking where one should avoid stocks with heavy exposure to index funds because those stocks will have the best returns during an equities downturn. http://theirrelevantinvestor.com/2017/08/31/today-in-market-history-the-first-index-fund/ http://theirrelevantinvestor.com/2017/08/31/today-in-market-...
- chkdsk 8y ago
  You absolutely can backtest VTI. We have reliable historical market data of the total US stock market (what VTI is) going back to the late-1800s. Also, please tell me 1 of those better options? The link you posted seems to take the opposite view from what you expressed. Batnick is very pro index funds.

patejam 8y ago

Unless you have some kind of special insight, why would you not just go with the flows of the overall market and invest in index funds? Seems like a good default when all options are technically unknown.

deleted 8y ago

[deleted]

chriogenix 8y ago

i second this opinion. past results are not indicative of future ones. The question is if you dont follow the passive ETF/index strategy what do you do? In that regard i suppose its better than doing nothing.