Index Funds
I have heard that Index Funds are better than the average mutual fund. In particular I heard good things about Vanguard Index Fund. This article from www.npr.org (National Public Radio) seems to support that.
Yale Money Whiz Shares Tips on Growing a Nest Egg (April 3, 2008)
David Swensen manages Yale University's endowment. Last year, he made a 28 percent return, adding a whopping $5 billion to Yale's endowment, which is now valued at $22 billion.
Index Funds or Mutual Funds?
Swensen says fees are also the big reason you should buy index funds instead of classic mutual funds. Index funds, which track market segments like the S&P 500, are a lot cheaper.
Swensen says the vast majority of professional mutual fund managers fail to beat those indexes.
"When you look at the results on an after-fee, after-tax basis over reasonably long periods of time, there's almost no chance that you end up beating an index fund," he says. The odds, he says, are 100 to 1.
Swensen, who cautions against trying to pick individual stocks, favors nonprofit funds like Vanguard and TIAA-CREF. There too, the lower fees will mean more money in your pocket over time.
Yale Money Whiz Shares Tips on Growing a Nest Egg (April 3, 2008)
David Swensen manages Yale University's endowment. Last year, he made a 28 percent return, adding a whopping $5 billion to Yale's endowment, which is now valued at $22 billion.
Index Funds or Mutual Funds?
Swensen says fees are also the big reason you should buy index funds instead of classic mutual funds. Index funds, which track market segments like the S&P 500, are a lot cheaper.
Swensen says the vast majority of professional mutual fund managers fail to beat those indexes.
"When you look at the results on an after-fee, after-tax basis over reasonably long periods of time, there's almost no chance that you end up beating an index fund," he says. The odds, he says, are 100 to 1.
Swensen, who cautions against trying to pick individual stocks, favors nonprofit funds like Vanguard and TIAA-CREF. There too, the lower fees will mean more money in your pocket over time.
