Feb 8th, 2008
The Joy of Index
I covered what an index was some time ago; an index fund is a mutual fund that follows an index. The wonders of the index fund include market matching performance, low expenses, and tax efficiency. It’s been shown many times that it’s close to impossible to beat the index on a consistent basis. Some people do it for a short period of time; others do it for a long period of time; but almost never does someone do it all the time. This includes professional fund managers.
I’ve praised index funds many, many times; so many times that I’m sure many are tired of hearing it from me. So I was delighted when a couple of other personal finance blogs ran articles on the virtues of index funds.
A guest point on the great Get Rich Slowly entitled How Lower Fees and Expenses with Index Funds Could Mean 33% More to Spend in Retirement spells it out with solid numbers right there. One third more is a heckuva reward. Additionally, another fantastic personal finance blog, All Financial Matters, pointed out quite specifically that Fees Matter!, and index funds are (or at least can be) the kings of low fees.
Keep those fees low. That’s really a key to stretching those investment dollars. Every dollar you can save in fees now will make a much bigger difference when it’s time to tap in. One of the best ways to keep fees low and make sure you never underperform the market is by using low cost, no load mutual funds. That can bring you substantially more joy–like 33% more–when measured in dollars.
[...] fired off a coupon roundup that has some good deals in it. 7. UncommonCents filled me in on the Joys of Index funds; yes, there ARE joys! 8. CashMoneyLife cooked up a post about Prosper; I’m still not on [...]
Carnival of Personal Finance #139: Valentine Edition
Valentine’s Day is just around the corner! It’s time to get out the scissors and red construction paper and make some hearts for those special people in your lives.
From celebrating frugally to funding your Roth IRA, you’re sure to fi…