What is Dave’s opinion of index funds?
Among investors, index funds can be a heated debate. Index funds are neither evil nor the answer to all your investment needs. Many times, index funds are no-load funds. This may mean you are choosing them without the help of a professional planner, though some do use no-load and index funds. (See Q&A on loads.) An index fund can be a part of a well-diversified portfolio. As an investor, you should understand that index funds are not typically actively managed. If the index your fund mirrors plunges, so will your fund. Don’t rule out a good fund because it is an index fund. At the same time, don’t forsake Dave’s common sense advice on diversification and the four types of funds he recommends with strong, long track records of success.
