Before your retirement, the stock market will almost certainly go through several crises. A wise investor making a long-term investment prepares to stay calm during downturns. That is the only way to invest successfully in the stock market.
A smarter long-term investment solution
The key to the effectiveness of the index approach is long-term thinking. Instead of trying to beat the market, this approach harnesses the average market return.
The index approach lets your investments grow alongside the world’s leading companies (1,600+) rather than risking potential setbacks.
And the costs are pleasantly low.
Index approach vs hand-picked stocks
The index approach means investing in the entire market at low cost, without picking individual stocks or bonds. It is an excellent way to reduce concentration risk and diversify both geographically and across sectors.
This approach delivers returns that, before fees, match the average result of global market indices. Year after year, the index approach outperforms traditional investment funds. That said, past performance does not guarantee equivalent returns in the future.
10%
In the long run, only 10% of active funds outperform
their corresponding market indices
Active funds underperform, are closed or merged
Active funds outperform passive management
Data sources: fktk.lv (Latvia, 2011–2016), oecd.org (other OECD countries; latest study – 2013 data)
