What are the arguments against index investing?

[Arnie]

SPY MDY DJI things like that.
And I'm not talking some one-off event like a war or revolution. My point is, over time, dollar cost averaging into a index like that will beat stock picking. Look at any iteration of investing in an index over any 25-30 year period. You would be rich.
I cringe everytime I read a post by some 20 something wannabe that thinks he can get rich day trading.

 

[qxr1011]

I cringe everytime I read a post by some 20 something wannabe that thinks he can get rich day trading.

problem is not what one wants (as they say one is a bad private who does not dream to become a general), the problem is they do not realize what it takes

by the way would you cringe less if it would be not 20 but 40 years old? he-he

 

[yiehom]

No need to fall to zero. All you need is the instrument, index or stock , to sell lower than you bought.

 

[Martinghoul]

Not quite zero...but close....FT30 (UK share index), in the 1970's, was down 80%.....Dow in the 1930s was down 90%...nasdaq in 2000(?) down 80%, all from their record highs.

Yep... The ICEX (Iceland's national "blue chip" index) lost arnd 94% in local ccy terms in 2007-08. The ASE (Athens Stock Exchange) lost arnd 90% from the peak in 2007.

 

[Visaria]

SPY MDY DJI things like that.
And I'm not talking some one-off event like a war or revolution. My point is, over time, dollar cost averaging into a index like that will beat stock picking. Look at any iteration of investing in an index over any 25-30 year period. You would be rich.
I cringe everytime I read a post by some 20 something wannabe that thinks he can get rich day trading.

This is untrue. There have been a number of long periods 20 years or more where a major index has gone nowhere or even gone down. The dow, sp500, Germany dax, Japanese nikkei (that one's still on going since it went to about 40k in 1989, and after 30 years it's about half that!). It will be a good lesson for you to look carefully at very long term charts of the major indices to verify what I'm saying.

 

[Martinghoul]

You also need to make sure to look at total return, rather than just the price (some indices are already in that format, IIRC). Furthermore, as soon as you have a possibility of investing in a different ccy, you need to consider FX risk, etc.

 

[murray t turtle]

I advise all of my young friends and family to invest the bulk of their money by dollar cost averaging into a blue chip index.
Over the long term indexes will move up. Unlike a stock, they can't go to zero. They are constantly replacing the laggards with new co's.
Very few have what it takes to invest in individual stocks and beat the market, much less match it.

%%
Good points Arnie ;or IBD highly rated mutual funds. BUT as far as someone willing to work..... The Random Walker Down Wall Street put a plug, perhaps for his book , in June 6, 2017 WSJ. And since he is suggesting index[ETFs] may not work as well as it has.LOL; may not work as wellas actrive managers in 4th quarter+ 1st quarter LOL.

NOT a prediction, but many may do better than average, 4 th quarter .WHY>??????? Because IBD knows much more about ''Nifty Fifty'' than MR Malkiel. Mr Malkiel maybe right on tulip craze insanity, bubble trouble, which is like bit con.

 

[murray t turtle]

Not quite zero...but close....FT30 (UK share index), in the 1970's, was down 80%.....Dow in the 1930s was down 90%...nasdaq in 2000(?) down 80%, all from their record highs.

%%
Visa; you proved his point, they recovered + are trending higher/record highs/bull market. But my comments apply to capitalist countries. Like Jim Rogers said...... commies can goof up themselves LOL Adding to the complexity, Chicoms copy capitalists so much, i do business sometimes with them, indirectly .

 

[ironchef]

This is untrue. There have been a number of long periods 20 years or more where a major index has gone nowhere or even gone down. The dow, sp500, Germany dax, Japanese nikkei (that one's still on going since it went to about 40k in 1989, and after 30 years it's about half that!). It will be a good lesson for you to look carefully at very long term charts of the major indices to verify what I'm saying.

However, in real life, few individuals invest by putting everything in all at once and then wait 20 year till retirement to spend it. Most put a small fix amount of money in their 401K or IRA monthly, if you run a 20 year running window analysis, such an investment scheme should do well after 20 years. It is true dollar cost averaging.

 

[ironchef]

You may want to learn how to trade around a core position.

But few understand what you just said and fewer practice this.

Best regards,