Untitled Page

• Owning an index fund or exchange traded fund is like owning a proportionate
    amount of an entire asset class. This makes it easier to diversify across asset classes.

• The market is efficient which means everyone gets the same information at the
    same time, so picking stocks doesn't beat buying the market (index funds).

• Index funds have low expenses because less analysis and fewer transactions are
    required to keep the fund representative of the whole asset class.

• Fewer transactions lead to lower yearly taxable capital gains, and the gains that
   are generated are much more likely to be long term rather than more highly
   taxed short term capital gains. This means more deferral of capital gains taxes,
   and more money working for you.

• Returns from equity index funds are higher than at least 78% of actively managed
   funds. Actually it is much more than 78% because over time poorly performing
   funds are merged into other funds and are no longer counted in the calculation,
   and the unpredictability of who will be in the 25% that beat the index make it
   hard to benefit from the few funds that do.

• An active manager of a bond fund will find it hard to add more than .25% than
   passive market returns and the expenses of an activelymanaged bond fund are
   typically .75%.

• For more on Index funds go to www.index101.net