Index Investing Is Riskier Than You Think

Index Investing Is Riskier Than You Think

Index investing has taken the market by storm. Hundreds of exchange-traded funds offer nearly unlimited opportunities to track indexes from every asset class, industry sector, and geographical region of the global economy. Index investing has some major … Continue reading at fool.com

Sirens Are Sounding for the Best ETF Trade Ever

Interest in the most popular exchange-traded fund that’s used to bet on increasing U.S. interest rates is rising again as investors speculate that the Federal Reserve may embark, as early as next month, on its first hiking cycle in almost a decade. Continue reading at newsmax.com

Index Investing Is Riskier Than You Think

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ETF Trading: Understanding ETF Liquidity

As you determine which ETFs best meet your clients' needs and objectives, bear in mind ETF liquidity and trading. This will help you better maximize opportunities and optimize trades at the best possible price in order to gain potentially higher total … Continue reading at valuewalk.com

Investment Tips

Russia Rally Reveals Love For Leverage

The Market Vector Russia ETF Trust (NYSE: RSX), the oldest and largest Russia exchange-traded fund listed in New York, deserves some credit. Not only has RSX been the best-performing member of the quartet comprised of the largest single-country BRIC ETFs … Continue reading at benzinga.com

Noteworthy ETF Outflows: JNK

Exchange traded funds (ETFs) trade just like stocks, but instead of ”shares” investors are actually buying and selling ”units”. These ”units” can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor … Continue reading at nasdaq.com

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Legal & General and Source form exchange traded fund alliance

Legal & General Investment Management and Source have formed a new alliance as the UK asset managers attempt to combat competition in Europe's fast-growing exchange traded fund market. London-based ETF provider Source has appointed LGIM, the asset … Continue reading at ft.com

ETF scrutiny continues after chaos of Aug. 24 but little consensus emerging on solutions

(ETF Exchange: What the ETF industry is doing to prevent wild trading swings) Steve Luparello, director of the SEC’s division of trading and markets, said the SEC is conducting a "careful examination" of the events of Aug. 24, according to a transcript … Continue reading at investmentnews.com

Index Investing Is Riskier Than You Think

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Fate Of EPF, ETF Hangs In The Balance

Commenting on the outcome of the meeting with the trade unions, Minister of Fisheries Mahinda Amaraweera stated that he made a request from the Prime Minister highlighting the need of a proper explanation on the government's intervention on the ETF and … Continue reading at thesundayleader.lk

Trouble Brewing for Homebuilders ETFs

ITB), the two largest exchange traded funds tracking homebuilders stocks, have not been much to boast about lately with ITB rising only modestly over the past month and XHB notching a small loss over the same period. The index of builder confidence hovered … Continue reading at etftrends.com

* Investment results are not guaranteed!

Describes how investing in index funds at 0/month and starting early makes it easier to retire comfortably than waiting to invest. It also demonstrates how just contributing 2% more per year, i.e. 6 in the 2nd year, 2.12 in the 3rd year, 8.36 in the 4th year and so on can change it from .4 million to .9 million after 45 years. The video demonstrates that a person who invests over 45 years can be a bellweather against unanticipated inflation.

Before investing, do your homework or work with a trained investment adviser to know that the investments meet your goals and financial status. Make sure to only risk what you feel comfortable losing and realize that stocks are a mechanism to outperform inflation over time. Realize that investing in the stocks can be quite risky, especially over the short-term and that the 8% rate of return mentioned is much less likely to be achieved by someone who has a shorter time horizon to retirement than someone who has a long time. Realize that past performance is no guarantee of future returns and that index funds like investments have a risk of loss.

If down 60%, the author doesn’t condone taking on more risk. The video assumes, but does not state that while the market was down 60% and the investor would have been down 60% if they had invested in 100% stocks, it assumes that the investor had lost an amount equivalent to their asset allocation instead.

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One Response to “Index Investing Is Riskier Than You Think”

  1. mycricket highlights

    thanks!

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