Comments on: Should I Invest in Index Funds or Managed Mutual Funds? http://20somethingfinance.com/index-funds-versus-mutual-funds/ Personal Finance Blog for Young Professionals Wed, 23 May 2012 01:29:00 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: Natalie http://20somethingfinance.com/index-funds-versus-mutual-funds/comment-page-1/#comment-13210 Natalie Tue, 29 Jun 2010 00:09:43 +0000 http://20somethingfinance.com/blog/2008/03/21/should-i-invest-in-index-funds-or-managed-mutual-funds/#comment-13210 My employer offers a very limited number of options for my 401k funds. However, I'm a big fan of the S&P 400 midcap fund and I have most of my funds there. I've been very happy with my choice, it's almost no-brainer investment. My employer offers a very limited number of options for my 401k funds. However, I’m a big fan of the S&P 400 midcap fund and I have most of my funds there. I’ve been very happy with my choice, it’s almost no-brainer investment.

]]> By: Shawn http://20somethingfinance.com/index-funds-versus-mutual-funds/comment-page-1/#comment-7145 Shawn Fri, 29 Jan 2010 16:27:04 +0000 http://20somethingfinance.com/blog/2008/03/21/should-i-invest-in-index-funds-or-managed-mutual-funds/#comment-7145 Why would the turnover ratio matter in a tax friendly account like a roth or 401k? Why would the turnover ratio matter in a tax friendly account like a roth or 401k?

]]> By: Sam_UAE http://20somethingfinance.com/index-funds-versus-mutual-funds/comment-page-1/#comment-6318 Sam_UAE Tue, 05 Jan 2010 13:58:54 +0000 http://20somethingfinance.com/blog/2008/03/21/should-i-invest-in-index-funds-or-managed-mutual-funds/#comment-6318 Gentlemen, I have few Questions; Can you please explain (in details) what is an index fund? (in Bloomberg, it says index funds are priced at the end of each tarding session, Is it tradable funds or not? Wha i understand is mutual funds are none tradable funds and ETFs are tradable funds. Am I right? Gentlemen, I have few Questions; Can you please explain (in details) what is an index fund? (in Bloomberg, it says index funds are priced at the end of each tarding session, Is it tradable funds or not? Wha i understand is mutual funds are none tradable funds and ETFs are tradable funds. Am I right?

]]> By: Daddy Paul http://20somethingfinance.com/index-funds-versus-mutual-funds/comment-page-1/#comment-6155 Daddy Paul Fri, 01 Jan 2010 19:26:08 +0000 http://20somethingfinance.com/blog/2008/03/21/should-i-invest-in-index-funds-or-managed-mutual-funds/#comment-6155 Index funds beat 80 percent of all funds. Makes it an easy choice in a 401K. Index funds beat 80 percent of all funds. Makes it an easy choice in a 401K.

]]> By: G.E. Miller http://20somethingfinance.com/index-funds-versus-mutual-funds/comment-page-1/#comment-533 G.E. Miller Thu, 18 Sep 2008 01:48:37 +0000 http://20somethingfinance.com/blog/2008/03/21/should-i-invest-in-index-funds-or-managed-mutual-funds/#comment-533 @ Cody - Your comment reflects a common misconception. Please check out my post on how mutual fund NAV's (prices) are determined. Market demand for a fund has no effect on its price. Please see this post: http://20somethingfinance.com/blog/2008/05/13/how-is-a-mutual-funds-share-price-nav-determined/ @ Cody – Your comment reflects a common misconception. Please check out my post on how mutual fund NAV’s (prices) are determined. Market demand for a fund has no effect on its price. Please see this post: http://20somethingfinance.com/blog/2008/05/13/how-is-a-mutual-funds-share-price-nav-determined/

]]> By: Cody http://20somethingfinance.com/index-funds-versus-mutual-funds/comment-page-1/#comment-532 Cody Thu, 18 Sep 2008 01:37:33 +0000 http://20somethingfinance.com/blog/2008/03/21/should-i-invest-in-index-funds-or-managed-mutual-funds/#comment-532 Look at past records? Past performance is no indication of future results. Actively managed funds that consistently outperform the market will increase in demand, therefore also increasing the price. The increased price will reduce the future returns to those that buy in at that higher price. Look at past records? Past performance is no indication of future results. Actively managed funds that consistently outperform the market will increase in demand, therefore also increasing the price. The increased price will reduce the future returns to those that buy in at that higher price.

]]> By: Larry http://20somethingfinance.com/index-funds-versus-mutual-funds/comment-page-1/#comment-334 Larry Tue, 13 May 2008 18:42:12 +0000 http://20somethingfinance.com/blog/2008/03/21/should-i-invest-in-index-funds-or-managed-mutual-funds/#comment-334 It is my understanding that, if I put X dollars in an indexed mutual fund, the number of shares of stock I hold via the mutual fund will not change (after ajusting for splits) unless I put more money in or take money out. I know that the situation with a managed fund is different. If the market crashes, and I want to keep my head and stand pat, the fund manager will none the less have to sell shares of stock at depressed prices to cash out the fund-holders who want to get out. Can anyone add any insights to this? It is my understanding that, if I put X dollars in an indexed mutual fund, the number of shares of stock I hold via the mutual fund will not change (after ajusting for splits) unless I put more money in or take money out.

I know that the situation with a managed fund is different. If the market crashes, and I want to keep my head and stand pat, the fund manager will none the less have to sell shares of stock at depressed prices to cash out the fund-holders who want to get out.

Can anyone add any insights to this?

]]> By: G.E. Miller http://20somethingfinance.com/index-funds-versus-mutual-funds/comment-page-1/#comment-83 G.E. Miller Sun, 23 Mar 2008 19:37:15 +0000 http://20somethingfinance.com/blog/2008/03/21/should-i-invest-in-index-funds-or-managed-mutual-funds/#comment-83 Hey Michael. The bottom line is how much are you willing to put into finding managers who are worth investing in? If you're not willing to do some solid research, then you may be better off with the index funds - and certainly, that's a bad place to start until your research has been completed. Hey Michael. The bottom line is how much are you willing to put into finding managers who are worth investing in? If you’re not willing to do some solid research, then you may be better off with the index funds – and certainly, that’s a bad place to start until your research has been completed.

]]> By: Michael http://20somethingfinance.com/index-funds-versus-mutual-funds/comment-page-1/#comment-81 Michael Sat, 22 Mar 2008 17:11:40 +0000 http://20somethingfinance.com/blog/2008/03/21/should-i-invest-in-index-funds-or-managed-mutual-funds/#comment-81 Great post. I've listened to Vanguard's podcasts on index funds where they mention outperforming actively managed funds 70% of the time and speak against chasing the latest fund manager with the highest yield as being the best way to lose your money. I stopped looking into managed funds at that point, but it seems that was a mistake... It seems like if you can find an actively managed fund with a reasonably low expense ratio that consistently outperforms index funds for a substantial period of time, that extra intelligence behind the asset allocation should have a good chance at outperforming the norm. Thanks for the insight. Great post. I’ve listened to Vanguard’s podcasts on index funds where they mention outperforming actively managed funds 70% of the time and speak against chasing the latest fund manager with the highest yield as being the best way to lose your money. I stopped looking into managed funds at that point, but it seems that was a mistake… It seems like if you can find an actively managed fund with a reasonably low expense ratio that consistently outperforms index funds for a substantial period of time, that extra intelligence behind the asset allocation should have a good chance at outperforming the norm. Thanks for the insight.

]]>