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i dont know anybody that pitches index funds as guaranteed appreciation, just that they will do average for cheaper. There are plenty of index funds that take
by idunno246 8y ago
i dont know anybody that pitches index funds as guaranteed appreciation, just that they will do average for cheaper.
There are plenty of index funds that take into account other countries, REIT indexes that hold real estate, etc.
Even if you use just a SP500 index, you get some global exposure as well - disney, coke, pepsi, etc are all worldwide brands.
Lets say its a given you can do better by adding more stocks, actively managed funds, actual real estate, etc, for the simplicity of it you get 80% of the way there with just one or two simple indexes.
- maxlybbert 8y agoDifferent people have different ideas of what an “index fund” means. Personally, I don’t consider it an index fund or a benchmark unless there’s a definition of what the fund tracks ( https://web.stanford.edu/~wfsharpe/art/active/active.htm https://web.stanford.edu/~wfsharpe/art/active/active.htm ). And when there is, and I want to invest in that market, I expect to do better by paying a little money to accept the average return for that market than by paying more to try to get a better-than-average return (because to come out ahead, it has to be better by at least enough to pay for the higher fees). But you’re definitely right that “average return for the market” may not be positive.