Passive investing in volatile markets: Experts weigh in

Investors often hear that despite market crashes, stocks tend to go up over time. But tell that to investors watching their portfolios decline, especially if they invest passively in index funds. Those represent groups of stocks which track indices like S&P; 500 (^GSPC), Nasdaq (^IXIC), or the Dow Jones Industrial Average (^DJI).

In continuation of Yahoo Finance’s series ‘What to do in a bear market,’ we asked the experts what they think of index investing during these volatile times.

The markets have taken a beating this year. Passive investors in index funds are under water. Is index investing over?

“Broadly speaking it’s not a good idea to try to time the market, whether you’re buying an index fund or an actively managed fund. When the market goes down it’s often the best time to be putting money to work for the long term. For the past decade plus we were in a period of cheap money where fundamentals were less important,” Jim Polk, head of equity investments at Homestead…

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