Index funds have lots of advantages.
Research shows that over the long term, index funds have generally outperformed other types of mutual funds.
Other benefits of index funds include low fees, tax advantages (they generate less taxable income), and low risk (since they’re highly diversified).
However, too much indexing can be a bad thing.
In this video, Jack Bogle talked about what happens if the whole investing world becomes an index, i.e. everyone invests all the money in index funds and no one buys stocks.
According to Bogle, it can be a catastrophe.
Warning: This video is to show you John Bogle’s view about index funds. Please do your research before doing any investment. A good balance between return and risk is the key to investment success.
Source: Finance Jane (Shared via CC-BY)
