Re: Why Mutual Funds are better than Index Funds
I acknowledge your point about ignorant investors. Although I don't see how it is more difficult to read a guide about the top performing mutual funds, then it is to study and understand what an index fund is.
Take it from the perspective of a financial planner: a couple totally ignorant about investing comes into your office asking for the best place to put their money. Would you put them into an index fund or a proven mutual fund? I would put them into a good value mutual fund because I think they would freak out if they saw the volatility in the index. This is due to their ignorance about markets, or just their nature. The longer they keep their money in, the more they will make, and thus the index funds are not conducive for them to keep peace of mind and to keep their money in place. So, that is why I argue that the mutual fund is still better than the index for the ignorant investor.
As for the CI funds, I will provide an explanation below.
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