Go with the flow

November 14, 2008 at 3:53 pm (Investments)

Everyone’s down about losing money in the market, but if you’ve gone with the flow your losses are not as bad. Investors who hire investment managers to actively pick stocks for a portfolio have lost more money than those who just buy an index, according to Standard & Poor’s recent report. The S&P 500 outperfomed 69% of active funds for the past five years. Its indicies for midcap outperformed 76% of actively managed mid-cap funds and its small-cap 78%. This is further proof on how hard it is to beat the market. In addition, index funds cost less, thereby giving you a little headstart in better returns. If you’re not working with an advisor who uses index funds, you’re getting too emotionally involved.

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