Burton G. Malkiel is the author ofthe best-selling
investment guide, A Random Walk Down Wall Street,
and a professor of economics at Princeton University.
Malkiel observes. "Index funds allow investors
an opportunity to buy securities of all different
types and are a sensible, serviceable method of obtaining
the benefits of equity (as well as bond) investing
with no effort, minimal expense and considerable tax
savings."
Douglas Dial is portfolio manager of the CREF
Stock Account Fund which is part of the Teachers Insurance
and Annuity Association and College Retirement Equities
Fund (TIAA-CREF). CREF is the largest single pool
of money invested in stocks in the world. Although
Dial was formerly a stock picking money manager, he
has seen the light and become a strong proponent of
indexing." "Indexing is a marvelous technique.
I wasn't a true believer. I was just an ignoramus.
Now I am a convert. Indexing is an extraordinarily
sophisticated thing to do."
Dial warns investors that the stock picking and market
timing activities of active money managers aren't
prudent because they "will produce greater deviations
from market returns." "Given that these
are retirement assets, avoiding the terrible downer
is worth the price of missing the moon-shot years.
If people want excitement, they should go to the race
track or play the lottery."
The investment goal of many long term investors is
the maximum accumulation of wealth after expenses,
costs, commissions and taxes with a minimum amount
of stress. These testimonials from leading investment
experts attest to the fact that the most efficient
and effective way to achieve this goal is to participate
in the indexing investment revolution.
From Index Mutual Funds: Profiting from an
Investment Revolution
Copyright, ©, 1998 by Wendell
Scott Simon.
Reprinted by permission. All rights reserved.
See also:
Foreward, By John
C. Bogle
Will Active Mutual
Funds Continue To Underperform The Market In The Future?
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