Ask Stacy: Are Actively Managed Mutual Funds Better Than Index Funds?

When it comes to mutual funds, you've got two choices: Hire an expert to pick the investments, or invest in a simple index fund. Which is better?

Ask Stacy: Are Actively Managed Mutual Funds Better Than Index Funds? Photo by JohnKwan / Shutterstock.com

Welcome to “Ask Stacy,” a video feature where I answer a money question sent in by a reader or viewer. (Learn how to send in a question of your own below.)

Today’s question is about mutual funds: Are you better off “hiring” an active manager to pick the investments within a fund? Or should you invest in a fund that doesn’t need a manager because it’s designed to simply mirror the market?

While it may seem that having an expert in your corner would produce better results, expertise costs money. So which should you choose? Here’s what I think.

For more information on this topic, check out:

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The questions I’m likeliest to answer are those that will interest other readers. In other words, don’t ask for super-specific advice that applies only to you. And if I don’t get to your question, promise not to hate me. I do my best, but I get a lot more questions than I have time to answer.

About me

I founded Localpizzadeliverywalledlakemi.info in 1991. I’m a CPA, and have also earned licenses in stocks, commodities, options principal, mutual funds, life insurance, securities supervisor and real estate.

Got any words of wisdom you can offer on this week’s question? Share your knowledge and experiences on our. And if you find this information useful, please share it!

Got more money questions? Browse lots more Ask Stacy answers here.

Stacy Johnson
Stacy Johnson
I'm the founder of Localpizzadeliverywalledlakemi.info and have spent the last 40+ years in the personal finance trenches. I'm a CPA, author of a few books and multiple Emmy recipient. I'm ... More

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