January 5, 2023

Index funds are good - but not necessarily the best

Index funds are good - but not necessarily the best

Should you invest in index funds, popular today, mainly in the form of ETFs, i.e. index funds that are traded on an exchange? Our opinion: Index funds are a good solution for investors, but not necessarily the best.

At the end of the day, even indexes do not answer the question of which markets to invest in. If you want to answer that, you have to look at the stocks that are in the funds, i.e. you have to do the same as someone who manages a diversified portfolio.* Just like putting together a diversified portfolio, the index investor also has to make active decisions, namely answer the question of which index fund to invest in.

And index funds are not beyond all doubt, both in terms of content and the product itself. In our videos we show aspects that are often not seen in ETFs.

Find out why it is better to invest yourself and why exchange-traded funds may not be as simple, safe or profitable as promised by watching our video collection or this playlist.

* Index funds are of course much less work than selecting broadly diversified stocks. This speaks in favor of funds, but in our experience it is less satisfying than the regular selection of individual stocks. However, you only notice this after you have done it yourself for a while. Read the Obermatt Investing Handbook (free with the newsletter) and learn how you can easily and safely get started yourself.

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