Index Investing Quotes

Most investors, both institutional and individual, will find that the best way to own common stocks (shares') is through an index fund that charges minimal fees. Those following this path are sure to beat the net results (after fees and expenses) of the great majority of investment professionals.

Most investors would be better off in an index fund.

Most of the mutual fund investments I have are index funds, approximately 75%.

By periodically investing in an index fund, the know-nothing investors can actually outperform most investment professionals.

Index investing outperforms active management year after year.

The word passive does a disservice to investors considering their options. Indexing provides an effective means of owning the market and allows investors to participate in the returns of a basket of stocks. The basket of stocks changes over time as stocks are added or removed based on its rules.

Nothing is simpler than owning the stock market and holding it forever, and that's essentially the idea behind the index fund.

Trying to pick individual stocks is a trap. I can't do it. Warren Buffett can, but hardly anyone else can beat the indexes over a long period of time.

Building a portfolio around index funds isn’t really settling for the average. It’s just refusing to believe in magic.

The average investor does significantly worse than a simple index... It's literally because of the way our brains are wired.

An index fund is a fund that simply invests in all of the stocks in a market. So, for example, an index fund might invest in every single stock or almost every single stock in the U.S. market, it might invest in every single stock abroad, or it might invest in all of the bonds that are out there. And you can make a perfectly fine investing portfolio that mixes equal parts of all three of those.

Index investing is an investment strategy that Walter Mitty would love. It takes very little investment knowledge, no skill, practically no time or effort-and outperforms about 80 percent of all investors.

"Now you can trade the S&P 500 Index in real time" was the slogan in the newspapers for the first ETF. What kind of nut would do that?

I believe investors should invest for the long run, so I don't buy and sell. I usually maintain the classic index of global equities, diversified U.S. and global and emerging markets, and when the risk is larger, I diminish the amount in global equities and put more into liquid assets - but very irregularly.

Here is a dirty little secret: Stock-picking is wildly overrated. Sure, it makes for great cocktail party chatter, and what is more fun than delving into a company's new products? But the truth is that individual stocks are riskier than broad indices.

A large and growing body of academic research suggests there are market anomalies that can be exploited to beat a strict index approach. Some of that research has been recognized with Nobels in economic science - William F. Sharpe in 1990 and Eugene F. Fama in 2013.

It seems to me - particularly for these retirement-plan investors, the vast majority of whom are not particularly financially sophisticated - by far the best way is to invest in index funds.

A low-cost index fund is the most sensible equity investment for the great majority of investors. My mentor, Ben Graham, took this position many years ago, and everything I have seen since convinces me of its truth.

The key aspect of an index fund is that many of them, not all of them, but many of them are extremely cheap.