That’s right! A guy who actively buys and sells stocks is suggesting you should stick with Plain Jane index funds.
Why?
Because it’s too difficult for 99% (a completely unscientific statistic) of the general public to outperform the market over an extended period of time.
Every week, at least one person will ask me for a hot stock tip. Almost every single time, I tell them to buy a basic Vanguard S&P 500 index fund. If they keep up the pressure and want something more aggressive, I tell them to buy the Vanguard Small-Cap Index Fund which passively invests in smaller, higher growth, but higher risk companies.
Now, before the pro-index fund, Boglehead crowd showers me with kudos and the pro-trader crowd throws flaming bags of dog crap on my porch, allow me a few moments to debunk the Get Rich Quick by Becoming an Active Trader myth.
(Click to continue reading…)
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