Quote:
Originally Posted by Alex from Montreal
To tell you the truth putting your money into mutual fund is not very wise. Most mutual funds will underperform the market, you'll be better off buying index funds in the long run. Trying to time the market is not a good idea neither.
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I agree with the first part, I only buy index funds from Vanguard. I also time the market and do very well. You have to know what you're doing though, it's not for everyone.
I did say the "average joe" will put their money in mutual funds, which is still alot better than a savings account. Most ppl are stuck with the funds offered by their companies' 401(k) plan.
Quote:
Originally Posted by Alex from Montreal
Only if your portfilio mimmick the S&P Index, your return will average 8%-12% in the long run. You can increase your return by replacing blue chip stocks with quality small and micro cap stocks.
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This isn't true, it's too general of a statement. Small cap stocks are much more risky than blue chip stocks. So while the winners will definitely outperform the market, the losers will totally disappear, happens all the time.
There's a reason blue chips are blue. 70% of "microcap" stocks go bankrupt within 5 years.