Top ten reasons NOT to index
by Sam the Stockbrokerman [with tongue planted firmly in cheek, eh?]
  1. My performance record has easily beaten the market in the past 4 years.
  2. Why do you want to settle for average? I can beat the average.
  3. Indexing the S&P 500 has worked great in the past, but are you sure you want to be heavily concentrated in one part of the market?
  4. Indexing is for beginners. My role is to find the best managers that fit your specific needs.
  5. 70% of mutual funds have beaten the market the past 3 months.
  6. Indexing works great in an up market, but what about the down markets? That's where active management can really add value.
  7. Indexing works only in large caps. In inefficient small and international sectors, active management crushes the index.
  8. I need to feed my family but I'm not creative enough to do more than run screens for best performing mutual funds.
  9. I like watching Maria Bartiromo all day long.
  10. I have to meet a sales quota to get the corner office. A buy and hold strategy just doesn't cut it.

 

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