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Berk's Blog

The Flood of Money Into Passive ETFs, Mutual Funds Has Slowed

Lifetime returns are mostly about investor behavior. Save while you are working, invest in stocks of great companies and don’t sell in a panic or buy at the top.

 

 

“Passive investment is now growth-tilted, momentum chasing, biased toward popular-weighted indices. Why should you expect the best returns from that?” asks Research Affiliates’ Rob Arnott.

Low-cost index funds are a terrific way to obtain low-cost diversification, but using them does not make advisors or client investors immune to following the crowd over a cliff.

Source: The Flood of Money Into Passive ETFs, Mutual Funds Has Slowed