Hello all,
My wife is a public school teacher and just changed jobs, so we have an opportunity to re-assess how we're managing her 457 account. It was formerly invested in an automatically-generated "moderately conservative" portfolio. This time, we've actually met with an advisor with a financial firm (Lincoln Investments) and have been able to discuss specifics of the portfolio. We're planning on changing our risk level to "moderately aggressive."
The advisor created a hypothetical portfolio for us which included some index funds and some actively-managed funds. When I told her that I tend to prefer index funds, she offered an explanation of the wisdom of holding both index and actively-managed funds, that managed funds are better able to deal with market volatility. She also said that we should especially be sure to have some managed funds in this portfolio because my Roth IRA and our taxable account are all index funds (which we set up through Betterment).
So, is she just trying to sell me something I don't need? Is she toeing the company line and more-or-less ignorant of index funds' superiority? Or is she right? Is it good to have some managed funds in your portfolio, to hopefully have some smart people wearing suits in an office somewhere helping you to deal with market volatility when the indexes are all over the place? From my countless hours reading MMM and similar sites and books on investing, I really haven't heard a strong case for investing in managed funds, except from... financial advisors.
Thanks for any advice and input!