Why index funds as you relate?

You know that a good strategy to choose its funds is to take funds indexed. These are funds that replicate mechanically stock market index, such as the CAC40. But why funds indexed relate so much? Why is it not worth trying to beat the market average?

Have always average. When you’re part of the group that invests in the equity markets, either directly or indirectly, through a mutual fund , for example, you recover, as each group member, the results produced by the market . As a group, we are means. That is to say that if the market an average of 10% and as a member of the group is 12%, is that another has only 8%. Without even considering the cost of your investment to outperform the market is a game to zero gain. If any one who wins, it’s just another lost.

By paying as little as possible. costs associated with investments that are the winners see their earnings reduced and that the losers have their losses increase. Who wins this game? You well know. It is the conduit that is the only sure winner: your broker, your banker, fund manager, your tax lawyer, the commercial that you sells these financial products, … The lottery, the state always wins. At the casino, the house always wins. In financial markets, it is the same. Wanting to beat the market is a game of losers, since this is a game to zero gain on which you have expenses.

Indexed funds have very low costs because they just reflect the market mechanically. They offer the performance achieved by the market at a reduced cost, both in time and money. Therefore, if you consider costs, indexed funds offer better performance than most investments. I recommend you invest in funds indexed for best gains at minimal cost.

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