An Index Fund Run

I’ve longed enjoyed the common sense, straightforward advice you find over at the Motley Fool, and the information in this article on trying to beat the market is no exception. There’s some nice advice in this little article, mainly that you shouldn’t try to beat the market unless you’re willing to put in the work…and even then, don’t count on it. To put it simply they say “either commit to investing, or commit to indexing.”

Now, the article does mention that most mutual funds fail to beat the market, noting that “some 75% of fund managers fail to beat the S&P 500 on an annual basis.” So why are there so many mutual funds out there pegging away, shooting for higher returns? Simple, it’s a very lucrative market. The article claims that “fund companies are pulling in some $117 billion per year simply in fees.” No wonder we talked about selling your mutual funds the other day.

The bottom line is this: if you don’t want to sweat it out and spend countless hours feverishly hunting for just the right stock combo to buy in order to beat the market, sit back, relax and invest in a nice, consistent index fund. Not quite as sexy as you might like, but relatively safe and reliable.