And so the rising tide money the Fed supposedly creates inflates asset prices in such a way as to make an index fund vastly preferable to a hedge fund.
So you don't buy a hedge fund, you buy a "structured note, " whose return is tied to an index of hedge funds.
If consistent performance is a product of skill as Mauboussin contends, than index fund investing is certainly a skillful decision for an investor to make.
Buy an index fund and make a donation to a Third World cause.
Liken it to the difference between a no-load index fund and an index ETF.
The case for a loss cushion is less compelling in an index fund, which tends to have low turnover and thus few taxable gains to absorb.
If you invest in a hedge fund, your adviser should be able to compare its returns against that of an index, such as one of those composed by Hedge Fund Research Inc.
Is this the future of the actively managed mutual fund: a bunch of ingredients thrown into the mixing bowl and hard to replicate by an index?
FORBES: The 'Secret Sauce' Of A Mutual Fund With A One-Track Mind
If you own a mutual fund, look at the beta of the fund to get a sense of how volatile the price is relative to a benchmark or an index.
There is always debate among investors as to whether style investing using index funds or a style-based asset class fund is an active management strategy or a passive one.
According to an index from the firm Rothstein Kass, female hedge fund managers produced a return of nearly 9% through the third quarter of 2012 (based on 67 hedge funds with female owners or managers), while their male counterparts, according to the HFRX Global Hedge Fund Index, choked out a mere 2.69% net return through September.
Imagine a room packed with people who have gathered to hear an advisor discuss the many benefits of index fund investing.
The sharp differences in fees highlight the need for investors to be vigilant about whether their index fund is actually a good deal, especially if they use an adviser who gets a commission from picking an expensive fund.
The product, offered through an arm of the fund company that sells personalized investment advice, is designed to be a substitute for conventional index funds.
For an index to be a success, it has to be widely accepted and liquid, so that fund managers can trade futures and options on it.
They say there is no reason to believe the sales costs of an index-linked pension fund will be lower, and that a big cause of high costs is excessive regulation.
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