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To: Dennis who wrote (1840)4/1/2001 8:01:33 AM
From: Arthur Tang  Read Replies (1) | Respond to of 3256
 
Dow index is the collection of the best companies in the world(bad ones gets eliminated over time, so it doesn't always win the best gains). Nasdaq index is technology oriented; and technology advances obsoleting some companies. AMEX is natural resources oriented small stocks. S&P500 is averaging too much(500 companies), so some years gains are reduced substantially. Index funds(where liquidity is) depend on market making(specialists and market makers).

Compare them to money managers(big money) of 8000 mutual funds, you have to leap frog on the money managers to have compounding 30%+ gains. That is hard work to go from one fund to another. So, index funds are safer and less risky, and no brainer at that. I teach beginners to invest with the big money as well as with the market makers. Never against them.

Long term buy and hold investment strategy requires 30 year performance(stock price) chart to do the selection(comparison of management and specialist combination) .

Good luck on all your investments.