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Invest in passively managed index funds, not actively managed mutual funds.

A constant theme of mine for individual investors.

Today, a short video courtesy of The Motley Fool. 

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For most individual investors, I believe that a passively managed, well diversified investment portfolio is the best approach for long term success.

I do not believe that paying higher fees for active management brings superior results over the long run. Instead, minimize investment costs and stick to index funds for the majority of investments. Let portfolio returns compound in your investment account, not in the pocket of an investment advisor or financial institution.

I have written extensively as to why I believe in this strategy.

Today, a little more evidence that a passive approach outperforms an active one. 

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Following the Experts

On 08/17/2011, in Economics, by Jordan Wilson

Another day, another example of experts getting it wrong.

Today it involves the economic forecast for Hong Kong. 

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Based on the differences between passive and active investing styles, it might appear that active management should easily beat passive results.

But, based on comparative research, the reality is much less clear.

Today, we will look at a few studies and see what they recommend.

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In my last post, I indicated that investors should normally not compete against professionals.

That does not mean you cannot rely on their skills in an attempt to enhance your own portfolio returns. In fact, many investors follow analyst recommendations and invest in mutual funds that are actively managed.

Whether this is a prudent investment approach is something we will look at.

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