Would you recommend index funds versus other investment opportunites?
March 17, 2010 by
Filed under investment opportunities
I have about $60K to invest. I’m considering an index fund as the fees are low and returns seem to beat the average.
I have a money manager at Morgan Stanely however over the past year my return has been minimal.
I’m thinking about testing out an index fund; any funds that you recommend?
Thoughts?
An index fund is a nice safe option. But it won’t prevent you from losing money. You will have a performance equal to the market – always.
Only by choosing alternative investment opportunities can you produce better results. If you don’t have the time or the expertise to screen and make those choices wisely, an index is probably the way to go.
If you don’t have time to monitor individual stocks, an INDEX fund might be the right way to go. But I prefer mutual funds personally. Index funds are not designed to beat the average– they’re designed to follow (or match) the average. In my mind, I have a better chance of beating the average with a good mutual fund with an experienced manager.
JUST MY 2 CENTS…
i suggest you to invest in education about investing first so that you can invest your money by yourself.
Since you’re talking about funds, you also have annual management & miscellaneous fees. So by definition, you will slightly under perform the market.
The only valid reason to invest in any mutual, bond, or index funds is if you just can’t take a couple hours a week for research.
See a fund you really like? Simply read their disclosures of their holdings & buy your own basket of individual stocks as close as you can.
Don’t forget that even indexes have their share of stinkers which influence the overall index negatively.
An index fund to recommend? NONE!!!!
However, I would recommend a new money manager if you’re not beating the overall market. My recommendation for a new money manager? You.