January 20, 2011

Index Huggers

Don't Waste Your Money
Index huggers are all around and getting paid to do nothing!

An index hugger is a mutual fund or stockbroker or financial advisor that basically buys the same stocks and or bonds that are in a particular index, usually the S&P 500 and then charge you to 'manage' your portfolio.

They may change some stocks here or there but in the end your portfolio will end up mirroring the index except one major difference - FEES !!!

These charlatans claim to be managing your portfolio when in fact, they are doing nothing more than you could do buy buying the index yourself and save a fortune in fees and commissions.

Most brokerage firms now provide you with detailed information on your statements.  It should provide your annual and / or year to date results as well as what the indexs such as the Dow Jones or S&P 500 did over that same period.  Don't be surprised if you results are the index minus the 1-2% fee that you pay.  This means your financial guy is an index hugger. 

Time to invest your own money for yourself !!!

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