Wednesday, February 25, 2009

Indexing Wins

Basic stock market index funds generally aspire to nothing more than matching the returns of a market benchmark. So in a miserable year for stocks, index funds may not look very appealing. But it turns out that, after fees and taxes, it is the extremely rare actively managed fund or hedge fund that does better than a simple index fund.

Strategies - The Index Funds Win Again - NYTimes.com

Even in down markets indexing proves to be superior to active management. Remember hedge funds are called this way because they are supposed to be a hedge in down markets. As if we needed a reminder on how effective the financial services industry is!

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