So I'm 23 and about to finally start making some real money. I've always heard that for the greatest asset accumulation over the course of your life - start early.

Well I've been doing some research and it seems that for the long term investor, indexed mutual funds are the way to go. According to the efficient market hypothesis, it's impossible to beat the market year after year after year. So investing in an indexed mutual fund, which seem to have the lowest expense ratio (0.2%), that mirrors S&P or another seems to be the way to go. In contrast, 50-80% of actively managed funds under perform S&P, so it seems indexed is best. Thoughts? If this is not the best route for a lone and inactive investor what is? If it is, what index is the best to mirror? If you give an index, what does the typical return and volatility of the index look like?

PS This is my first time ever looking in or posting in this forum so I apologize if this is a has been post.

A2345

OK so I feel like an @$$ because I just started reading through the posts on here and indexed mutual funds are suggested in virtually every post so my bad. But in any case, if you have any advice for a young guy like myself I would love to hear it.

A2345

If you are going to do straight index investing, at least familiarize yourself with ETF's. Here is a list.

http://finance.yahoo.com/etf/browser...=0&cs=1&ce=693

I'm not saying these are better than mutual funds, just know they exist. For expense ratios, returns, etc. I think they are a great baseline to demand that a index fund beat over time to earn your investment dollars. Heres a quick explanation:

http://en.wikipedia.org/wiki/Exchange_traded_funds

for some unknown reason, your name tilts me pretty hard.

Barron

Yeah, I know its pretty awful to look at. If you want to tell me how to magically change those S's into spades...


A2345

i like this fund CGMFX, it an aggressive fund but a good one. it destroy's the index. but it all depends on your risk. if you can't handle bad days it isn't a fund for you.

but index funds are good save investments. but not always the best option depending on your risk tolerence.

OP - follow what you've read. The above advice isn't too great. There are always people desperate to blindly recommend ticker symbols. What's the point of this?

Your tolerance for risk can be satisfied by adjusting the weighting of various index funds in your portfolio - not by gambooling it into a random ticker symbol which dropped 20% in one day recently.

lol. the signature with the spades is far worse.

First off it isn't a random ticker symbol. Do a little more research before you spout off about a mutual fund you obviously know nothing about. It did have a huge drop in one day at the end of last year. But still returned 80% in 2007 and was up 12% in Q1 this year, how did the market do over that time?

I just love how its gambooling on a random ticker like i just pulled one of the best performing funds over the past 1 3 5 and 10 years out of thin air.


I openly admitted it isn't for everyone it takes a stomach to stick with Ken. I was mearly trying to suggest to the OP that there are other options out there and gave him my Fav that I have been in for years. And have made a ton of money in. I did my reaserch and the OP should do his if he is interested. I am not going to do it for him.

Plus it might not be what he is looking for he might want a save passive fund. He might not want a fund that can have up to 20% of its positions short and doesn't have to be diverse. It can focus in stocks that go up. And Bet against ones the manager feels will go down.

He seemed fairly new and green so I was just trying to inform him that there might be better/differnt options out there he might not have been aware of. By no means was it a recommendation to buy CGMFX or not to buy a index fund. I have recommended to many people on this form that they do that and think it is a very good investment for a lot of people.

QFT

We def. agree on this issue