The latest video instalment of How to Win the Loser’s Game (Part 6) has been posted at SensibleInvesting.TV and will also be housed shortly at Findependence.TV.
The fund management industry won’t tell you this, but all the evidence points to the humble index fund being the most appropriate investment vehicle for the vast majority of people. And there are few advocates of indexing as staunch as Warren Buffett — the most famous active stockpicker of all. The video includes the following quote from Buffett:
“When the dumb investor realizes how dumb he is and buys an index fund, he becomes smarter than the smartest investors.”
In fact (although this isn’t in the video) even former hedge fund manager and TV personality Jim Cramer often tells his Mad Money audience that the first $10,000 of young peoples’ portfolio should go in an S&P500 index fund or ETF before venturing into picking individual stocks. Continue Reading…