Index Funds vs. Actively Managed Mutual Funds – How to Choose

One of the most common pieces of investment advice goes something like this:  “If you want to be a successful investor, put your money in low cost, passively managed index mutual funds.”  It’s offered freely – in magazines, via social media, TV interviews, books, and blogs  – by writers, professors, even strangers at cocktail parties.  This advice is bestowed upon us with the confidence deserved by only the truest of universal truths.  The idea here is that by investing your money in low-cost index mutual funds, you can’t go wrong, and you will reach your goals.  All things being equal, low costs = successful investing.  But it’s just not that simple. Continue reading