If you feel like you’ve been brow-beaten with the message that index funds are the investment of choice, you’re not wrong. They are favored by many investors who have studied the returns of passive and active funds over the years.
If I don’t believe in investing in individual stocks, what in the world do I use to create our wealth when we invest? The answer can be summed up in just two words: Index Funds.
In fact, it doesn’t take long when someone asks me about investing for me to mention passive index funds. The fact is that as an investment choice, they are extremely hard to beat. Here are some reasons why Index Funds remain king.
When one part of your portfolio zigs, you want the other to hopefully zag. This happens through diversification, which is one of the key ingredients to successful investing.
A passive index fund portfolio is low maintenance. If I have the S&P 500 index fund, I know that it is going to consistently carry the 500 largest capitalization companies in the U.S. economy.