With recent developments in the financial markets, we’re seeing quite a bit of people who are concerned about index investing and the effects it may have on the economy. We dedicated today’s episode of Grow Money Business to addressing some of these concerns. Throughout the episode, Grant shares his thoughts on four of the biggest arguments against index investing and some studies that question the legitimacy of each.
"Alternatives" has been one of the buzzwords floating around my circles as of late. I'm always suspicious when some new fad pops up, but in the case of alternatives, I'm more amused than anything else; they've been around for quite a while, but as earning yields and interest rates (and, thus, future expected returns of stocks and bonds respectively) fell over the last couple decades, they started moving from "valuable" to "necessary". I'm more of the school of thought that says "if an asset class is ever good, it's always good", but I won't complain at an opportunity to address an important topic!
Why invest? Do you invest to achieve goals or to beat the market? If you listen to much of the financial media, you probably think you should strive to beat the market. But is that your true goal? Most money managers fail to beat the market – or their benchmark – on a regular basis. Does that matter, or should we be more concerned about something other than performance? I maintain that meeting your goals should matter more.
A broad-based, globally diversified portfolio is hands-down the right answer when it comes to growing wealth for the long term. But that doesn’t mean other, more speculative and risky investments are always a bad move…
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