Quotes about the Effectiveness of Index Funds

Here are some quotes from the wonderful book The Bogleheads' Guide to Investing (I LOVED the book -- see my rating for details) on the effectiveness of index funds:

• "Most investors, both institutional and individual, will find that the best way to own common stocks is through an index fund that charges minimal fees. Those following this path are sure to beat the net results (after fees and expenses) delivered by the great majority of investment professionals." Warren Buffett, Chairman of Berkshire Hathaway

• "I am a huge, huge, huge fan of index funds. They are the investor's best friend and Wall Street's worst nightmare." Jonathan Clements, author and writer of the popular Wall Street Journal column "Getting Going"

• "An index fund dooms you to mediocrity? Absolutely not: It virtually guarantees you superior performance." William Berstein, Author of The Four Pillars of Investing

Just a few more reasons I like index funds. It's hard to argue with Warren and the rest.

For more thoughts on investing, see these links:

• Best of Free Money Finance: Investment Posts

• Take These Steps before You Start Investing

• Costs Matter If You Want to Maximize Investment Returns

• Why Asset Allocation is Important and Market Timing Doesn't Work

Comments

[moneymonk]

what are some of your picks ?

[Dave]

The Four Pillars of Investing by William Bernstein is my favorite book on investing, and an absolute "must read" in my opinion.

[Skott]

Another great thing about index funds, if you are just starting out as an investor, is you can get great diversification in just a few funds--maybe even just one. The amount you sock away and your asset allocation are the biggest determining factors, anyway.

[Scott]

Two things:

1. Great post. I'll check out that book.

2. Would you mind adding my finance blog to your blogroll? Just shoot me an e-mail and I will do the same on mine.