Experts agree that investing in index funds is a winning strategy when playing the stock market for two reasons: they’re broadly diversified, eliminating the risk of picking individual stocks, and they’re low-cost," says Business Insider in an article with the heading: "An early retiree who interviewed 100 millionaires found many of them built their fortunes using a simple investment strategy championed by Warren Buffett." While there’s no doubt the strong bull run of the last decade has been kind to index funds, claiming it has built many fortunes seems a bit of a stretch. Still, assuming it has, and the greatest investment mistake has been paying too much in trying for too high a return as Fred Schwed Jr reminds us in his book Where Are the Customers Yachts?, there is a reverse side to this picture — which will become all too evident when the markets turn bearish. Schwed pointed to "a tendency, on the part of men in a fiduciary capacity to play so safe with a client’s funds that t...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.