The single best way for investors to access all markets and market segments is through the appropriate index fund. For instance, if small company stocks are doing well, then small company index funds will do well. If small company stocks are out of favor it s not the fault of small company index funds that they will also lag. Compared to actively managed funds of the same average size company, index funds will do well in both good and bad markets. Said another way, indexing is a strategy that works in every market where it has been tested.
Active management is a strategy that has failed in every market where it has been tested.
Rather, investors should broaden their horizons to markets beyond US large companies, and gain exposure through the appropriate index funds. The featured writer is solely responsible for the content of this article. Investors should consult all available information, including fund prospectuses, before making any fund purchase, and must exercise their own independent judgment when making any investment decision. Any questions or comments regarding this policy or Mutual Funds Interactive should be directed to BES . Inc. All rights reserved.