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twist: Indexing, as you point out, is a buy-high, sell-low strategy. As such, it will necessarily disappoint going forward, at least in relation to the recent past. But, the above observation notwithstanding, dollar-cost-averaging into an Indexing product remains the most rational strategy for the average investor. The Indexers are right about at least one thing: Only in Lake Wobegon can everyone be above average. Whereas, in the real world, most investors will wind up with below-Market-average results, because of the financial drag of transaction expenses and taxes. A tiny minority will work night and day, and beat the Index. Most of us, though, will not. |
