Money Matters - Investing Part 2: The Why

Introduction
Welcome to Money Matters, a weekly discussion group relating to topics of personal finance and financial education/literacy.
Attendees are encouraged to share their personal experiences related to finances to help others learn and achieve their financial goals.

Topic
The topic will be Investing Part 2: The Why.
Now that we have some idea about the domain of investing, we need to figure out what actions should be taken.
A proposal will be made on what the average investor "should" (in my opinion) be investing in. Supporting arguments, research, and statistics will be presented and discussed.

Discussion Prompts / Questions

• Diversification is referred to as "the only free lunch in investing". What does this mean, and why is diversification useful?
• Is it common sense to invest in passively managed, index-based funds?
• Are there financial theories that support passive investing?
• SPIVA (Standard & Poors Index Versus Active) research contains over 20 years of data comparing the performance of actively-managed funds and passively-managed funds. Do you think one management style outperforms the other?
• Do you know how big bank (RBC, TD, etc) mutual fund fees compare to those of passively-managed ETFs? How much of an effect does this have on your portfolio over a long period of time?

Additional Materials
Some materials relating to this topic are:

• (reference) Efficient-market hypothesis and Random walk hypothesis
• (reference) SPIVA Research
• (video) International Diversification
• (book) The Little Book of Common Sense Investing
• (book) A Random Walk Down Wall Street

Soliciting Notice
Any attempts to advertise, promote, or sell financial products and/or services will not be tolerated.

Financial Advice Disclaimer
The information provided is for general informational purposes only and should not be considered personalized financial advice. Consult with a qualified financial professional before making financial decisions.