Do low-cost “passive” funds really have a performance advantage over higher cost “actively managed” funds in the long term? It seems counterintuitive, but according to Nobel Prize winner William F. Sharpe and low-cost passive fund pioneer John C. Bogle, the answer is “yes.” And we’re not talking just a percentage point here or there either. Here’s where ground-breaking research from the ivory tower intersects with the real world, and can have a significant impact on the size of your retirement nest-egg.
Many young people begin investing with the mistaken notion that a single big idea can make them rich. For some, the big idea is stumbling upon an investment that provides a 1,000-to-1 return. For others, it’s a technique that provides sure-fire investment decisions or an investing course or guru that promises instant riches. Experienced investors offer some more realistic guidance on the route to investment success.
By Fund Library News Wire | Friday, March 07, 2014
Stock markets advanced on the week as the U.S. economy added 175,000 jobs in February while factory activity expanded, as the Institute for Supply Management’s manufacturing index rose to 53.2 from 51.3 in January. In Eastern Europe, the Ukraine crisis cooled just a bit while Russia consolidated its annexation of Crimea, ignoring the largely ineffectual threats of diplomatic and economic sanctions emanating from various Western capitals. With the Russian move now a fait accompli, and with no further immediate escalation of global geopolitical tensions, markets edged down on Friday, but remained ahead on the week.
Q – I recently read some reports about Warren Buffett’s annual letter to shareholders of Berkshire Hathaway Inc. It seems he always gives advice to investors, which the media distill into something like “five rules to invest like Warren Buffett.” But on reading these so-called rules, they seem really general and vague. So my question is this: Is it really possible to invest like Warren Buffett? And if so, how do you go about it? – Sue T., Thornhill, Ontario