Monthly Archives: June 2017

Index funds could be an expensive mistake

The past couple of years have been very difficult for investors. It has also been a tough time for the professionals, with most managed funds and LICs showing mediocre results and a large number with negative returns.

It is not surprising that many investors have become disillusioned and there has been a huge inflow of cash into index funds. Many investors seem to be accepting the advice of Warren Buffet who is an advocate of index funds for the small investor when he says: “When trillions of dollars are managed by Wall Streeters charging high fees, it will usually be the managers who reap outsized profits, not the clients. Both large and small investors should stick with low-cost index funds.” (2016)

But how sound is this advice in 2017 and how good is index investing? Consider the following monthly chart of the ASX200.Index investing

If you had invested in an ASX200… Continue reading

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