Comments on: Why index funds are rarely at the top…and why I like them anyway.

By: Mike

Mike — Thu, 12 Mar 2009 17:22:01 +0000

“It never ceases to amaze me that the same people who will agree they have no business picking stocks think that they can pick stock funds.”

Hehe. I’ll sign that statement.

By: Frank Curmudgeon

Frank Curmudgeon — Thu, 12 Mar 2009 17:15:41 +0000

It is indeed a well articulated argument for index funds. Not that it will convince the many buyers of active funds who think that they (or their advisors) are just a little better than average at picking them. It never ceases to amaze me that the same people who will agree they have no business picking stocks think that they can pick stock funds.

By: Brian

Brian — Wed, 11 Mar 2009 18:53:00 +0000

Excellent arguments! Your reasoning matches mine (and many others) very closely.

By: Mike

Mike — Wed, 11 Mar 2009 16:36:55 +0000

Indeed, it does come down largely to personality. Some people just won’t be satisfied with something as boring and simple as index funds.

By: Neal Frankle

Neal Frankle — Wed, 11 Mar 2009 16:20:47 +0000

Very well articulated Mike.

I agree with your points – for most folks – the index option is a good choice. There are many other active strategies that will outperform the index fund strategy at times, and underperform at others.

Bottom line, depending on the kind of investor you are, the index strategy may be the one to go with.

My experience tells me that investor personality type has a great deal to do with it.

Anyway, this is a fantastic response and I really appreciate it. YOU ARE THE MAN MIKE!