The Frustrating Advice Given to “Beginner” Investors
It’s one step away from unlocking an essential truth about investing
“Investing in index funds is great for beginners.”
I’ve read that advice from financial writers countless times… and it drives me up the wall because it’s so close to providing readers with a simplified roadmap to building wealth as a long-term investor — but it doesn’t take the final crucial step.
Investing is not a game of horseshoes; getting almost there on a coherent investment strategy doesn’t win you any extra points.
Investing in index funds is great for nearly everyone
When finance writers tell their readers that index investing is great for beginners, it implies that as they gain more experience, they should move on to a more “advanced” form of investing.
This is simply not true.
Not only is index investing good for beginners, but it’s also good for just about anyone who wants to invest in stocks. You’re not going to beat the market, so the next best thing is to own the whole market while minimizing investment fees — that’s precisely what index funds do.
