Financial tip of the day.com - FREEDOM THROUGH FINANCE
Social Sites
  • Financial Tip Of The Day
  • Books
  • Websites
  • Contact Us
  • Disclosure

TO INDEX, OR NOT TO INDEX: THAT IS THE QUESTION! 

12/2/2015

0 Comments

 
Picture
I've read a number of articles recently on indexing, which in case you didn't know, is investing via an ETF (Exchange Traded Fund) via one entity. It allows for you to have ownership in all of the companies of an index without having to go out and buy them all individually.  It saves a ton of money and a ton of time.  

The more and more data that comes in from this seems to be moving me more and more to indexing myself.  I'd love to think that I'm a master stock picker, but the data from what I've done over the past 10 years just doesn't quite prove this.  It's almost impossible to tell, but I truly believe that I could have made more money over the past 10 and even 15 years if I'd just bought index funds and left them a lone.  

With that said, I also don't believe in blindly throwing money at something without some sort of introspection.  I think this is how bubbles happen, which isn't bad for those who know how to play them.  I have done well profiting from bubbles, but picking winners during times of average results has proven to be more difficult for me.  

As a result I've slowly been moving my money to undervalued exchanges and will keep them there.  I have not put any money into any S&P index because I believe it's just way to expensive.  According to the Shiller PE, total market cap to gdp, and the ratio of total market cap to gdp all are showing that the market is overvalued.  However, the opposing view is that interest rates are considerably lower than they have been in much of recorded American history.  The lower they go the higher asset prices go.  The decrease in asset prices most likely won't happen until interest rates begin to rise considerably.  

Here's another great article on indexing vs managed funds (especially hedge funds). 

 http://msantoli.tumblr.com/post/110804679383/cry-me-a-river-that-leads-to-omaha
0 Comments



Leave a Reply.

    Author

    This website was created due to the atrociously misguided financial advice that I've heard over the decades.  Financial freedom is not intellectually strenuous, but it takes discipline. 

    RSS Feed

    Categories

    All
    BHAG UPDATE
    College Savings
    College Savings
    Credit
    Economics
    Estate Planning
    Estate Planning
    Financial Planning
    Financial Planning
    Insurance
    Investing
    INVESTMENT JOURNAL
    Mistakes
    Net Worth Update
    Retirement
    Tax
    Thrift

    Archives

    August 2017
    May 2017
    April 2017
    February 2017
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    October 2015
    September 2015
    August 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014
    August 2014
    July 2014
    June 2014
    May 2014
    April 2014
    March 2014
    February 2014
    January 2014
    December 2013
    November 2013
    October 2013
    September 2013
    August 2013
    July 2013
    January 2011

Powered by Create your own unique website with customizable templates.