In his book, Index Mutual Funds: Profiting from an Investment Revolution, Scott Simon makes the case that index funds are the best investment choice for most people. Quite simply, investors who are well versed in proper indexing strategies and remain committed to them over the long run are likely to achieve better investment performance with less stress than most investors who attempt to "beat the market" by timing it or by investing in actively-managed mutual funds (or individual stocks and bonds).
Far more than an exploration of how investors can benefit from the many advantages offered by index funds, this book also examines the inadequacies of Morningstar, Value Line, newsletters and other sources of investment information relied on by investors and reveals why they usually don't help and may actually harm them. It includes a fascinating look at Peter Lynch's record and the many unexpected problems that investors encounter even when they follow an investment guru.
In addition, Simon spells out how asset allocation decisions can be implemented much more effectively with index funds than with active mutual funds or individual stocks and bonds, describes the steep odds against successful market timing and explains why the investment information system (which is made up of the media, active money managers and others) is not enthusiastic about index funds. He also shows how the proper diversification of a portfolio of index funds makes it so convenient to and inexpensive to reduce risk and/or increase return, how mutual fund commission loads, annual expenses, trading costs and taxes really impact investment performance and many other nuggets of information to help make you a better investor.
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