index funds Archives | Wealthfront Blog Personal Finance & Investing Insights Wed, 12 Jan 2022 01:12:44 +0000 en-US hourly 1 https://www.wealthfront.com/blog/wp-content/uploads/2019/09/cropped-wave-logo-transparent-hi-res-500x500.png index funds Archives | Wealthfront Blog 32 32 Active Investing: Rest in Peace or Resurgent Force? https://www.wealthfront.com/blog/active-investing-versus-passive-investing/ Wed, 28 Dec 2016 16:10:56 +0000 http://www.wealthfront.com/blog/?p=7147 Editor’s note: Today’s guest post is republished from Professor Aswath Damodaran’s blog, Musings on the Market. I was a doctoral student at UCLA, in 1983 and 1984, when I was assigned to be research assistant to  Professor Eugene Fama, who wisely abandoned the University of Chicago during the cold winters for the beaches and tennis […]

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]]> Is Indexing Worse Than Marxism? https://www.wealthfront.com/blog/indexing-worse-than-marxism/ Tue, 22 Nov 2016 04:07:16 +0000 http://www.wealthfront.com/blog/?p=7094 Index funds have always been ridiculed by active mutual-fund managers.  Two recent events have fueled a new set of criticisms.  The mid-year 2016 Standard and Poor’s report on index fund performance showed that the superiority of low-cost indexing, whether in the form of mutual funds or exchange-traded funds (ETFs), has increased over time.  Over the […]

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]]> Has Indexing Become Too Popular? https://www.wealthfront.com/blog/indexing-become-popular/ Thu, 15 Jan 2015 16:13:48 +0000 http://www.wealthfront.com/blog/?p=4930 Indexed investment strategies (passively holding portfolios that simply buy and hold all the securities in a particular market) continue to increase in popularity. Currently more than 35% of investment portfolios use index funds to gain exposure to the U.S. stock market.1 And according to Morningstar Investment Research, more than 55% of the moneys invested in […]

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]]> Why You Shouldn’t Just Invest in the S&P 500 https://www.wealthfront.com/blog/why-you-shouldnt-just-invest-in-sp-500/ Tue, 25 Nov 2014 15:53:57 +0000 http://www.wealthfront.com/blog/?p=4862 Diversification matters. Diversification is the key to long-term investment success because it can insulate you, to some extent, from losses. If you feel insulated, you are more likely to stay invested and keep investing through market volatility. Being properly diversified also enables the actions that help you during market corrections: rebalancing and tax-loss harvesting. Investors […]

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]]> Indexing and the Curious Case of Alibaba ($BABA) https://www.wealthfront.com/blog/indexing-curious-case-alibaba-baba/ Tue, 21 Oct 2014 15:38:26 +0000 http://www.wealthfront.com/blog/?p=4821 It has now been 40 years since I published the first edition of A Random Walk Down Wall Street. The book, about to come out in its 11th edition, had a very simple message: Investors would be better off buying a broad-based index fund that simply held all the stocks in the market. As a […]

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]]> Indexing and the 2014 “Stock-Picker’s” Market https://www.wealthfront.com/blog/indexing-2014-stock-pickers-market/ Thu, 21 Aug 2014 15:22:46 +0000 http://www.wealthfront.com/blog/?p=4587 In January of this year it was widely believed 2014 would be a “stock-picker’s” market. While the S&P 500® index of large U.S. stocks produced an extremely generous return of more than 30% in 2013, an indexing strategy was deemed unlikely to be effective in 2014 — or so active managers argued in an attempt […]

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]]> Wealthfront Named ETF Strategist of the Year https://www.wealthfront.com/blog/wealthfront-etf-strategist-of-the-year/ Thu, 20 Mar 2014 13:06:30 +0000 http://www.wealthfront.com/blog/?p=4366 Today I am proud to announce that Wealthfront has been named the “ETF Strategist of the Year” by ETF.com (formerly IndexUniverse), the world’s leading authority on exchange-traded funds. We are especially gratified to be chosen for this award from among all investment management firms that use ETFs, not just new entrants. At Wealthfront, we strive […]

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]]> Missing the Obvious on Fees https://www.wealthfront.com/blog/missing-the-obvious-on-fees/ Thu, 23 Jan 2014 17:46:38 +0000 http://www.wealthfront.com/blog/?p=4288 I have a personal confession. For nearly 50 years, I’ve missed the “obvious” reality: Fees for investment management are not low. They are high; very high. When investors recognize this “new reality” — that fees are not trivial but are crucial — the beautiful “inside” world of fund management will experience a powerfully disruptive revolution. […]

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]]> Q&A with William Sharpe: Investing In a Turbulent Market https://www.wealthfront.com/blog/william-sharpe-retirement-planning/ Thu, 30 May 2013 18:25:15 +0000 http://www.wealthfront.com/blog/?p=3920 Nobel Prize-winning economist William Sharpe recently published an article showing retirees how much more money they could have in retirement by avoiding actively managed funds in favor of index-oriented funds. In the article, “The Arithmetic of Investment Expenses” in the Financial Analysts Journal, Sharpe showed that a person saving for retirement who chooses low-cost investments […]

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]]> Five Ways ETFs Surpass Index Funds https://www.wealthfront.com/blog/passive-investing-etfs-vs-index-funds/ Fri, 01 Feb 2013 19:13:59 +0000 http://www.wealthfront.com/blog/?p=3539 We often get the question from clients: What is the difference between an index fund and an ETF? Even people who understand ETFs don’t understand the difference between these two kinds of investment products. We believe ETFs are index funds, evolved. To understand why ETFs represent such an advance over index funds, you have to […]

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