Five Reasons NOT!

Forbes just published an infuriating article that looks written to save active managers from passive indexing: "5 Reasons You Should Own Stocks Instead of Mututal Funds (Or ETFs)"

When you click the link above, you WILL get the story, original Forbes' link here, but you will also see my comments pointing out the false statements and faulty logic of the author's premises and conclusions. Don't be fooled by false claims and colloquialisms, there is no basis for this story title or arguments made.

There IS a sophisticated argument against indexing which you can find here. And even this story misses much of the systemic risk indexing unavoidably presents. But for practical purposes we are nowhere near its limits and, today, does not apply to individual investors.

So go on and continue to buy and hold passive index funds and earn returns superior to actively managed funds for as long as they last in the foreseeable future.

Feel free to post comments.

Disclaimer: Posts are for education only and not investment advice, may be subject to change without notice, and, while prepared with care, may be subject to omissions and errors.