psusense

Are Index Funds the Only Rational Choice?

What a long article when all you are doing is dig up convenient facts for some argument which does not compare time vs money returns. When you add your money to index funds over long period of time you are aiming to a:) get a better return than sitting on cash. 2) avoid loss of principal by placing it in stocks based on tips from uncles or cramers or CNBC jokers, or even seekingalpha "experts". Now add to the fact that when an investor has to choose 15 stocks (that is 15 businesses in several sectors probably spanning many geopolitical scenarios) the "investors" has to spend a lot of time for a unguaranteed return.
There is a reason why many people are conservative and prefer bonds and gold and other hard assets. Then there are others who invest in one or two established divy paying businesses (risky of course, e.g Enron). But still this a well researched issue and your article is not contributing too much new information, imho. Your article starts off being addressed toward "investors" which makes me think you are addressing the average investor. But towards the end you change your tune and say that the sophisticated investor should own stocks. New Flash: An investor becomes sophisticated when he/she chooses individual businesses to invest in- thereby picking stocks. So category A is not your audience, Category B, is way ahead of the curve to be reading your articles. I hope you don't have any connection to penn state..[random remark based on last name]