Sunday, May 28, 2006

I recommend index funds

Some investment advice from the Spring 2006 issue of the Charles Schwab magazine On Investing:
If you can anticipate positive earnings surprises for your stocks, it will help you outperform the market.
The statement is both vacuous and dangerous at the same time--an amazing feat. Although it says little more than "buy stocks that about to go up," it encourages people to try to outguess the market and churn their portfolios, generating fees for Charles Schwab. Schwab owes its customers better advice than this.