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LOL! · 06-29-2008, 01:39 PM

I thought that we had laid to rest a long time ago the FALSE impression that INDEXING equals S&P500.

Many of my index funds have trounced the S&P500 over the last several years.

So get this straight in your head: INDEXING DOES NOT MEAN FOLLOWING THE S&P500 INDEX. (Yes, I am SHOUTING at you!)

Indexing to me means: First select your asset allocation, then fulfill it with low-expense-ratio, passively-managed no-load index mutual funds or index ETFs. There is especially no reason to purchase an actively-managed fund in a taxable account.

If you want small caps, get small cap index fund. If you want value stocks, get a value index fund. If you want emerging markets, get an emerging markets index fund. If you want bonds, get a bond index fund.

Whatever you do with your equities, the S&P500 index is a poor choice for 100% of your equities.

06-29-2008, 01:39 PM	#21
LOL! Thinks s/he gets paid by the post Join Date: Jun 2005 Posts: 3,084	I thought that we had laid to rest a long time ago the FALSE impression that INDEXING equals S&P500. Many of my index funds have trounced the S&P500 over the last several years. So get this straight in your head: INDEXING DOES NOT MEAN FOLLOWING THE S&P500 INDEX. (Yes, I am SHOUTING at you!) Indexing to me means: First select your asset allocation, then fulfill it with low-expense-ratio, passively-managed no-load index mutual funds or index ETFs. There is especially no reason to purchase an actively-managed fund in a taxable account. If you want small caps, get small cap index fund. If you want value stocks, get a value index fund. If you want emerging markets, get an emerging markets index fund. If you want bonds, get a bond index fund. Whatever you do with your equities, the S&P500 index is a poor choice for 100% of your equities.