Funds Stage a Comeback: Time to Forgive and Forget?

Another way to look at actively funds versus index funds goes something like this...

Penny smart. Dollar stupid.

You need to make more the offset the management fees, so you're working harder, not smarter.

I don't work for them, but bookmark this site if you value your money...

http://www.vanguard.com

Mr. Bogle also has an intriguing book out about how to rescue American capitalism, in which he discusses the move that has been made away from direct ownership to management by intermediaries (in terms of who manages the wealth). It's worth a read.

Angie Koutrotsios of IL 2:06AM September 04, 2009

Having read this fabulous book titled "Learned Optimism" by famed guru of the new field of Positive Psychology, Martin Seligman, I put a positive cognitive spin on the current state of the economy and determined that since I am a member of Generation X, time is on my side, even if we're just coming out of this recession. This is the time, if you've not already done so, to promptly go out and open a Roth IRA and to accept the fact that although the market will recover sloooooooooowly, there is still time to make money from the stock market if you are still relatively young. Just get in now, while stocks are good buys, and in time, especially if you put in a little more on a regular basis (dollar cost averaging), you'll get more bang for your buck when the market is way up again.

But arguing against index funds is most likely being done by those who work at actively managing funds and making their commish money from trying to convince the rest of us that they are going to "beat the market!" long term. Um, no. I don't think so.

Over the long term, actively managed funds cost more money! They charge fees to manage all that activity. Get into a Vanguard index fund instead. NO LOAD.

And read something by Mr. Bogle. who will tell you just why you should not put so much faith into trying to "beat the market!" long term.

It's a pipe dream.

Vanguard Index. Roth IRA. It's slow and steady wealth-building instead of trying to get rich quick by being impatient and shelling out fees for actively managed funds.

Have any of them really beat that market over decades, once you factor in the higher expense associated with running them? Come on, now.

Angie Koutrotsios of IL 7:49PM July 30, 2009

I'm unsure of ms. marquardt's background in personal investment counseling, but she sure is doing no real service to your readers by interviewing the principal of the mutual fund store for recommendations and advice. that's akin to talking with a doctor for advice on a conservative drug regimen for heart disease when he makes his money implanting stents. nothing like providing useless information here. - Why in the world would anyone who has any real desire to hold on to what they have, invest in the likes of these very average, two star funds with expense ratios well above the 1% average with a 10 K minimum to get into the fund. Thanks but no thanks. You get the picture. As the previous glmory of ca stated, stick with the indexes. This is irresponsible reporting.

jonathan of PA 9:12PM July 12, 2009