should I invest in index funds or an actively managed fund?

Many pros admit that Index funds do as well as actively managed funds.(at lower costs)

Many people are now using ETFs for still lower costs...

I like a combination of all three, provided that their performance does well.

And I do watch that performance.

I also like junk Bonds! And REIT funds...

Fidelity and Vanguard have lower costs.

I feel it is important to buy a fund that pays monthly or quarterly dividends, so that when the market

does decline (and it will) you still will get your dividend.

And that is what I consider 'investing' as oposed to speculating.

Without a doubt - the index fund. They almost always have lower management fees and since they reproduce an index there's little trading so the turnover of the portfolio is much less than actively-manged funds. This reduces your tax burden from capital gains. The sad truth is that the vast majority of actively-managed funds do not outperform the market - over the long run. Yes, the management companies put out slick adverts showing that XYZ fund beat the market in the last five years but that's no guarantee it will do so in the future. And guess what? The management team just changed. There are thousands of mutual funds so if it was a con toss that a fund did or did not beat the market over a year than half would. A year later a half of those would so you have a quarter of the funds beating the market over two years. A year after that, the market-beating funds are one eighth of the total. So take a wild guess as to which fund get's the adverts? And this result is predicated on random events. Be advised.

My advice is to invest in ETFs - a far better investing tool. Low fees and you can trade them since they are quoted on the stock exchange - unlike their miserable twins the mutual funds. Good luck!

Wow... there are books written that covers all this... yet you want a simple answer. There is no simple answer. If you understand Mutual Funds and have a plan you'll pick the right funds.

1. Read 2-3 books on Mutual Funds and especially no load, low fee funds.

2. I spent 30+ years in all actively managed funds.... I beat the market in these funds. Now since I'm close to retirement my asset allocation has taken a change and I'm in about 25% Index Funds and ETF's.

3. As a young person it would make sense for a good part of your Fund Investments to have little to no yield.

Read those books. Learn this stuff. Most of the people on Yahoo Answers will only give you answer that don't fill in all the blanks. Make your own choices, based on knowledge.

As a mutual fund investor for more then 23 years

I prefer actively managed funds even though index

funds are a bit cheaper and do just about as well.

Its like dealing with an actual person and not a robot.

Funds with the highest payouts are also the funds

that have the most risk. Small cap, international

and sector funds. If your working, look into a 401k

or use the Roth IRA along with your investments.

DO NOT deal with a fund company that carries

a load. Best are Vanguard, Fidelity or TR Price.

Your assumption that the return is decrease is fake imo. it fairly is truer it you undemanding the money' returns over an prolonged term. Index money undemanding the entire marketplace. yet there is plenty sector rotation and categories of money do better at distinctive cases. Small caps do nicely with low rates of pastime and an improving financial equipment. They return greater than indexes at plenty greater at those cases. fee money have achieved poorly for some years because of the fact there have been no longer distinctive low fee money for this decade or longer. yet now? there is extensive fee because of the marketplace fall. it can be a super time to verify fee. comparable is genuine with super Caps and Blue Chips having been somewhat overrated even after the internet bubble burst. The Dow index fell under something of the marketplace and those have been a splash overpriced imo. no longer now. Sector shares? Commodities and oil did plenty better than the marketplace maximum of this decade yet additionally might have taken the bigger hit interior the final year. With index money you get the canine alongside with the sturdy shares. In an energetic controlled fund you get a miles better decision because of the fact they're chosen. I even have one that in many cases has outperformed the marketplace. you could nicely in case you have a powerful experience whilst to purchase low in to a sector and rotate out whilst the charges upward push. yet this is a form of marketplace timing with the aid of sector. it fairly is way less demanding to do because of the fact the parameters are long-term. I also have a lot of motives for making an investment in distinctive techniques with energetic administration fairly than merely take the "undemanding".