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What you describe is exactly the problem I have with index funds. I manage a decent amount of money through Vanguard. The index funds in my portfolio fell les

What you describe is exactly the problem I have with index funds. I manage a decent amount of money through Vanguard. The index funds in my portfolio fell less and recovered sooner, but at the cost of raw gains. The managed funds I have basically fell apart because apparently the fund managers are idiots who didn't even try to keep up with market trends. I do expect those to recover quickly and have some decent gains again, but we'll see. More risk, more reward. 2019 better be good for the premium I'm paying. I noticed awhile back that a lot of my funds were very Apple heavy, and so not as well diversified as I would have hoped (index funds included). They disclose this, mind you, but you have to read what you are buying. Anyways, I moved more money towards international and mid-caps to try and offset risk. Index funds have a way of being frustratingly constrained. It's not a silver bullet is all I'm saying. Don't get me started on bond funds. Total, total crap the last few years. REITs same way. The only really decently reliable returns I have gotten were from my own portfolio of stocks (not a fund) and some high-dividend yield funds. But even dividend paying stocks nosedived last quarter (Q4 2018), which I attribute directly to the FEDERAL RESERVE and its fuckery with the funds rate. Everything is manipulated one way or another, never forget that. It's hard to be a small investor with others moving billions around all the time. If you're still reading, I ditched a lot of bond funds in 2018 and went towards shorter term individually purchased bonds and even brokered CDs until interest rates settle back down. Vanguard's bond funds are just kind of trash and don't do what they are purported to do for your portfolio which is try to solve the ever-elusive correlation problem. Many times, I've watched bond funds move in lockstep with equities because the Fed is king. Not a safe haven during a big drop, just smaller losses? The people on Bogleheads will hate me for saying this stuff. If you're new to investing or naive or don't care, just do a 2-fund portfolio with total stock and total bond and call it a day. There. RIP John.

prometheuspk 8y ago
Then you're not the customer for index funds. They are meant to be highly risk averse, and give decent gains to people who want safety of modest to low gains over high gains high risk.
- achillesheels 8y ago
  The fact that they are indeed for the risk averse is why I found it quaint Bogle’s Funds have been called “Marxist” according to a quote from Barron’s last year. People would choose to suffer collecting paychecks and squirreling away their money instead of using their collected six figures in savings and taking a chance at starting a business, creating necessarily healthy market forces which leads to new demand in labor and services. This is how capitalism is supposed to work from the ground floor. Toiling away 25 years in a cubicle eschewing social responsibilities like the FIRE subreddit ought to be morally reprehensible - that’s how strongly I feel about it (I’m active in two businesses I’ve co-founded and have enjoyed seeing economic theory from the ground up).
  - exolymph 8y ago
    Not everyone is equipped to start and run a company. It's not a universal skill or anywhere near it. If more people invested their retirement savings in businesses, you'd mainly have more ill-conceived restaurants and T-shirt companies going bust.
    - achillesheels 8y ago
      I agree, but certainly those who are banking 30%+ of their gross six figure income have, in general, both the luxury to pick a market and the temperance to stick it out for several years before their momentum breeds its own growth and a long-tail retirement plan in itself. It’s only easier said than done by those who have never made the commitment to suffer to try.

prometheuspk 8y ago

Then you're not the customer for index funds. They are meant to be highly risk averse, and give decent gains to people who want safety of modest to low gains over high gains high risk.

achillesheels 8y ago
The fact that they are indeed for the risk averse is why I found it quaint Bogle’s Funds have been called “Marxist” according to a quote from Barron’s last year. People would choose to suffer collecting paychecks and squirreling away their money instead of using their collected six figures in savings and taking a chance at starting a business, creating necessarily healthy market forces which leads to new demand in labor and services. This is how capitalism is supposed to work from the ground floor. Toiling away 25 years in a cubicle eschewing social responsibilities like the FIRE subreddit ought to be morally reprehensible - that’s how strongly I feel about it (I’m active in two businesses I’ve co-founded and have enjoyed seeing economic theory from the ground up).
- exolymph 8y ago
  Not everyone is equipped to start and run a company. It's not a universal skill or anywhere near it. If more people invested their retirement savings in businesses, you'd mainly have more ill-conceived restaurants and T-shirt companies going bust.
  - achillesheels 8y ago
    I agree, but certainly those who are banking 30%+ of their gross six figure income have, in general, both the luxury to pick a market and the temperance to stick it out for several years before their momentum breeds its own growth and a long-tail retirement plan in itself. It’s only easier said than done by those who have never made the commitment to suffer to try.