I do agree with him, too but the conclusion that one should invest in index funds (to ensure your pension) is wrong: The population of the industrialized part of the world is aging. If everybody buys stock to pay the pension to whom will he sell? Younger people who intend to do the same. What happens if there are less younger people who want to buy than those older ones who want to sell? If you're buying index funds you only make sure that you get the avererage of all who invest in the stock markets. But if the return of this isn't sufficient to make a living when you're old that's bad news.
The author of the article says the market is a zero sum game. I can't see that even from his perspective. If everybody that invests in an index fund makes 10% per annum and gets more out than he puts in then it is not zero sum.
Do you feel confident to buy and forget right now, or you have meant cost averaging buy every month ? Walter
Monthly dollar cost averaging. But it would still be very hard for me to start now though, knowing just a bit about the markets. In general, however, I think this is the best joe investor can do. peace axeman
That's silly. If the issue prices all rise then everybody in an index fund gets more money out. That is what the author is saying. If all the stock prices doubled overnight then everybody got more wealth. It's not even a zero sum game. Options maybe.
and how do you think prices rises? by somebody else putting more money in. at the end of the road the *only* way you'll get more out (in real terms) t is if more money than you want to take out was put in by somebody else.
not true at all.if a company comes up with a cancer cure it will double overnight without any extra money being added.