- Thinking for yourself and not doing something just because everybody else is doing it can get you far, especially in investing.
- Equally weighted indexes have outperformed market capitalization weighed ones.
- The solution is to look for common sense in investing and to look at valuations.
Mutual funds and ETFs that track indices are very popular these days. The prevailing attitude is that only a handful of active investment managers can consistently beat the market and therefore it is best to just invest in the whole market. Investing in the whole market means buying a small piece of every company, or at least that is how it should be. In this article we’ll explain the biases behind index investing. More →