If you want to succeed in your career, get better at golf, or become a master gardener, you need to spend countless hours improving your knowledge and skills. When it comes to investing, however, it’s possible to succeed with a strategy that requires minimal financial savvy and no more than an hour or two a year. In fact, if you’re an index investor, the best thing you can do to your portfolio is neglect it.
Indexing investing makes no attempt to pick market-beating stocks, identify brilliant fund managers, or predict where the economy is headed. Instead, it attempts to capture the returns of the overall market at the lowest possible cost by using index funds and exchange-traded funds (ETFs) that track entire asset classes, such as the entire Canadian or U.S. stock markets, or the whole universe of Canadian bonds.
What are your tips for index-investing? We invite you to share one or two with our readers in the comments field below. The person with the best tip will get a copy of MoneySense’s new retirement book, Guide to Retiring Wealthy, when it comes out in mid-October. For the full story on investment strategies, pick up a copy of the September/October 2010 issue of MoneySense, on newsstands now.