Eric you're leaping before you look. Why not look at he history of FPACX? Why not check out the manager like I said. I have been in this fund for 8 years and he's beaten my VTSMX.
Why would I care about the history? Is that some sort of indicator for future success? Of course it's not. The only thing that's certain is that the expenses of this fund will outweigh the expenses of an index fund.
EGADS!!! Own an individual stock?!?!? Can't beat the market??? I say yes you can. I have personally. Have you ever tried? Do you ever question what you read? Don't you think Bogle has a vested interest in making you think you can't? Dont you think statistics have been known to lie?
The majority of
professional money managers don't beat indexes. Why would I, as an amateur, think that I could do better than a professional? I have no doubt that someone could get better than average returns in the short run, but over the long run it's unlikely to continue. So no, I do not own any individual stocks because I do believe in statistics. All the evidence is there in my previous links. You're free to disregard it, but I prefer to make my decisions based on data.
If you want proof I'll give you my top few stock picks and humor me and watch or we can make a friendly little wager on who out performs and test the theory of who can outperform. Here's my picks:
1- Howard Hughes Corporation- HHC.
2- Corporate resource services- CRRS.
3- Fifth Street finance
I don't care about your picks. I hope they all return 1000%. The point was, and is, that telling a
new investor that they should be picking individual stocks to beat the market is bad advice. New investors should be in index funds. Once they're no longer new investors, they can then decide for themselves if they think they're smarter and can do better than professional investors. You're welcome to tell experienced investors your thoughts. I could not care less. But for this poster, who is a new investor, looking to invest for the long haul, the best thing they can do is avoid fees and get the average market return using an index fund.
I DO WANT TO SAY 90% OF YOUR MONEY SHOULD BE INDEXED AND DIVERSIFIED- but don't think for one second you can't beat the indexes. You can. It's not that hard. I'll take those 3 stocks and FPACX and put them up against whatever indexes you pick. The gauntlet has been thrown down. What do you say?
If it's not that hard to beat indexes, why would you invest in index funds at all? You could be FIRE'd way earlier with these higher than market returns that you feel are not hard to get.
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but to say it's the only way to invest is really idiotic. Tell that to Zuckerberg and how "investing" his time and money on a dumb Internet website is worse than investing it in an index fund. Or to Buffett that buying individual stocks (he buys them in gigantic sums) is dumb.
The hubris of the people who think it's the only way is disappointing. And yes, I have read Malkiel, French, Fama, etc. I took classes with Schiller in college. All great people, all smart people. But by definition some people are above average, some people are below average.
I don't believe that I nor any other poster said that it's the only way to invest. Of course investing in your own company or in real estate has merits. Considering that the OP did not state that he owned his own company, I didn't believe it was an option in this case. I also am not a real estate expert, so I have no opinions to offer the OP on that subject. If he's so inclined, there's a whole subsection dedicated to that.
It was my opinion, based on the original post, that the poster was a new investor looking for how he should further invest. It seems you agree that in this case, the OP may be better off in index funds than investing in individual stocks or taking a vacation.
It's a free country. I'm also heavily invested in Vanguard indexes but there are other ways to make money. I own my own company which makes me money, and I own real estate directly which has also made me money.
The Internet Bogle heads are so cultist that they think their way is the only way. For beginners, I do think it's the best way to get started, but it's not the only way.
For the OP, perhaps it is solid advice. Really, anyone seeking investing advice from an online forum probably should stick to low fee index etfs