It’s an average person’s game, with better than average results over time (and by “average” I mean compared to most of those day traders and probably your friends).
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Today’s post may surprise you, scare you, or even enlighten you (maybe all three?
), but I’m sharing it with you anyways because that’s what us financial bloggers do.
No more fancy stock picking, no more weird strategies of picking out my favorite companies, just plain ol’ “you make money when the overall stock market makes money, and you’ll lose money when the overall market loses money.” (Which is when you pick up even MORE shares, btw! And if you believe in the markets all around, as I do, then why not cast a wider net around it? Who recently turned heads when he shared that he wants his own estate to go almost entirely to index funds once he’s outta here. I called up my stock broker friend to get his advice on this too, and he just laughed at me. ), I was in it to win it ;) And according to everything I’ve read, statistically the odds are in your favor going this route than others long term anyways.
Here’s a graph on how the Dow has performed over the past 100 years, even though it needs to be updated (we’re now hovering around the 17,000 mark): If you think it’ll continue going up in the long term, then you might like Indexing :) It certainly has its fair share of supporters not only from the personal finance blogger world, but also Vanguard itself (d’uh – they INVENTED index funds! Even my stock friend gets it wrong and he spends 60 hours a week researching this stuff! To put things in perspective, here are all the stocks I used to own as of a month ago.
The fund’s key attributes are its low costs, broad diversification, and the potential for tax efficiency.
Investors looking for a low-cost way to gain broad exposure to the U. stock market who are willing to accept the volatility that comes with stock market investing may wish to consider this fund as either a core equity holding or your only domestic stock fund.This is the fund retirement pennies in (see, I’m not the only crazy one!), and which is still aggressive’ish, but less so than VTSAX.) but I do want to make a fair amount over time and I’m totally fine being patient and waiting for it. I’ll gladly take 80% of a total 100% amount of money for minimal effort vs 90-100% and killing myself to get it.Which of course is never guaranteed since we all know you can’t time the market anyways (you do know you can’t time the market, right? So after all my reading and thinking, I came to the conclusion that it’s all about INDEX funds for me. I told him luckily I wasn’t in it to have fun (even though “fun” is in index FUNds – zing!0,000 invested, and I couldn’t tell you what half these funds consisted of, nor their expense ratios (partly because I never paid attention, and partly because it’s confusing as hell): Just one kick-ass fund :) And I know exactly what’s in it (3,671 stocks), and exactly what the expense ratio is (0.05%, lower than 95% of similar funds out there).