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Weekend reading: The other benefits of index funds

Weekend reading

Some good reads from around the web.

There is more to investing in index funds than pure cost saving – a point well made by Rick Ferri in my post of the week:

As I look back over the last 12 years, what is most impressive about index investing isn’t the rock bottom fees or respectable long-term returns, it’s how index investors avoided thousands of disasters in the marketplace that torpedoed the savings of millions of investors.

Index investors were not the victims of dozens of Ponzi scams or hundreds of multi-billion dollar corporate and municipal bankruptcies, nor were they they casualties of poor investment advice from self-proclaimed market experts.

When index funds fail, they fail because the market falls.

True, I do suspect we’ll see some unexpected incident some day – a good reason to avoid synthetic ETFs – but at least index funds aren’t compromised at birth.

Happy Christmas to all our readers, and here’s to an enriching 2012!

Money and investing blogs

Deal of the week: Still trying to understand how the global economy got into such a mess? Philip Coogan’s new book Paper Promises is receiving some praise. Not exactly full of Christmas cheer, mind.

Mainstream media money

  • The servant problem – The Economist
  • Top tips for financial planning in 2012 – FT
  • UK retail bond issuance to treble in 2012 – FT
  • What the UK property market did in 2011 – FT
  • Prime London property is up 14% on the year – FT
  • ‘Experts’ predict house price falls in 2012 – Guardian
  • Top places to live for quality of life in UK – Guardian
  • Baby boomers were more frugal in their youth – Telegraph
  • Investing in gold in 2012 – Telegraph
  • Every stock market index is down in 2012 – Telegraph
  • A day with Tamara Ecclestone, billionaire – Independent
  • Don’t bet on fund managers [that’s what I took from it!]Independent

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{ 4 comments… add one }
  • 1 Faustus December 24, 2011, 3:51 pm

    A great round up of Christmas reading.

    Have a good celebration yourself Investor and thanks for all your great work over the past year with what is still the UK’s best personal investment blog!

  • 2 William December 24, 2011, 5:25 pm

    Wish to echo ‘Faustus’ – wishing you a Merry Christmas and Prosperous New Year (I extend this to all readers of and contributors to Monevator). This is a valued reference source which hopefully will make us all a little wiser and prosperous in 2012.

  • 3 The Investor December 24, 2011, 5:39 pm

    Thanks, much appreciated!

  • 4 Alex December 25, 2011, 6:06 pm

    Hi TI,

    1. I’ve really enjoyed this blog in 2011. Thanks to you and TA for all your hard work.

    2. That latest article from Hargreaves Lansdown (HL) in ‘The Independent’ (your last link) is amazing – for so many reasons. I’d already seen it: on my first reading I almost dropped the laptop.

    3. One irony: there HL explicitly recommends a passive approach for the US – the first time I’ve seen HL actually suggest trackers for any market/sector. But I thought HL could reliably identify star (active) fund managers.

    4. Presumably, this change in behaviour is unrelated to the recent increase in HL’s fees for those silly people investing in trackers. Totally unrelated.

    5. Another irony: it’d be difficult to read a more convincing demonstration of why we should invest using a passive approach. Yet, again, I thought HL could reliably identify star (active) fund managers.

    6. Incredible.

    7. Oh, yes, I am posting on 25 December. Have fun, everyone…

    Alex

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