How a Broad Index Fund Can Hurt Retirees
The problem isn’t with indexing! But since broad-based indexes like the S&P500 hold both growth and value stocks which often perform very differently, broad-based stock index funds surprisingly often force retirees to sell recent ‘losers’ along with ‘winners’ when they withdraw money or generate cash. This can be avoided, with no need to change the overall asset allocation, by holding less broadly-based index funds and ETFs instead.
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