Can’t Convince Your Friend To Invest With Index Funds? Logic Might Not Work

Ted

FYI: “Wow,” you say, “Your financial advisor has a really nice car.” Your friend smiles. She knows what’s coming next.

“I guess you help make those massive car payments.” She just smiles again.

She invests in actively managed mutual funds. No matter what you say, she won’t fire her advisor and switch to low-cost index funds. You try all kinds of logic. But logic isn’t working.
Regards,
Ted
https://assetbuilder.com/knowledge-center/articles/cant-convince-your-friend-to-invest-with-index-funds-logic-might-not-work

districtwanderer

Let's not forget there are plenty of advisors who are fee-based, don't receive commissions or kickbacks, and use low cost/index core funds for clients.

Ted

@districtwanderer: Remember the gang at Asset Builder are indexers, selling DFA Funds.
Regards,
Ted

davidrmoran

I have inlaws who pay for advisor management, allocation decisions, handholding, distributions, monitoring, voice on the phone, the usual comfort and sleep-at-night stuff.
Why should I be (and who am I to be) insulting in telling them they how illogical they are?
I mean, if people were logical, the OP would be working hard for the "president" 's impeachment.

VintageFreak

@davidrmoran. The answer depends on whether the advisor/manager/etc is a celebrity or not.

I have a business proposition for you. Lets start a fund. I even have a ticker figured out. SBEMX. Let's find someone at CNBC, CBS MarketWatch and the like to pen an article. "The Freak and the Moran". If you do it, they will come. People are just waiting for celebrities to invest their money actively in a S&P 500 index.

SBEMX - Sucker Born Every Minute Fund. IF we time our fund inception well, we can start another version of it SBOMX. Sucker Born Every Minute Opportunity fund.

PS - No problem if SBEMX is taken. Just like dot com URLs, we can purchase it.

davidrmoran

haha, perhaps a growth version, and a value version
we be rich, maybe even celebrities