A: Well Capt. John the good news is that you are ahead for the period, while the S and P is virtually flat for the last ten years. (Gold is flat for thirty years) But I digress. Up until just a few years ago, very few fund managers could routinely beat the S & P Averages year after year. The S & P represents 500 stocks of companies with Capitalization from large to small, but no international (about 65% of the income does come from multinational companies). Anyway what I want to say is:
I love individual stocks and have time to watch the news on them, research competition, and use my gut to tell me when enough is enough. Managed funds like American Funds, Fidelity in various size and sectors will probably out perform the index funds during certain short periods, but they are hampered by the shire number of shares that they have to move in and out of to make a difference in there performance. Effectively you have hired a manager to move you in and out of individual stocks for you. Your hope is that he (she) is in the right ones at the right time. The index fund stays in the same stocks except for when a company has been added to or taken out (or reduced ) within the underlying index. This means a investment company like Vanguard does not care what the news is in the short term. These are long term investments. I believe that continuing with investments in the index funds on the same dollar cost averaging strategy that you have been employing will, by the time you retire (in almost 19 years), give you a very nice nest egg.
To summarize:
For the investor that is looking for long term positive performance within equity investments, the index fund will continue to shine into the future. More good news, from what I could ascertain, the majority of non-hedged non-shorting managed mutual funds, fell a greater amount in the June 2008 to March 2009 then did the indexed funds.
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