On Sep 10, 2007, at 7:17 PM, Sabri Oncu wrote:
I agree with Daniel. Index funds are not always your best choice. For example, if you are invested in an equity index fund in these days, you are in serious trouble. Index funds are managed with the objective of minimizing the risk of loss relative to the index. But, they are wide open to the market risk. If the market goes down, the index fund goes down together with the index. Nobody in the index fund business manages the market risk. But then markets always go up in the long run, aren't they? At least, this is what we have been taught for who knows how long.
For someone saving for retirement or some such, with a time horizon of 30-40 years, there's just no reason to try to outguess the market. "These days," for sure - if you mean the last month or two. If you mean the last three or four years? The last 20-25 years? The last 50-60 years? Everyone can be a genius looking backwards. Doug
