LUXEMBOURG CITY, LUXEMBOURG / ACCESSWIRE / December 6, 2017 / While many traders consistently gravitate towards a combination of stock purchases and mutual funds as a more aggressive way to increase their ROI over the long term, indices are often overlooked as reliable investment. Although not nearly as volatile, index investing is a rewarding choice that offers numerous benefits for those willing to take on a more patient strategy. Q Smart Limited, an internationally-recognized broker, highlights the main advantages offered through this increasingly popular method.
Sometimes wrongly criticized as an overly safe technique that yields smaller profits when compared to others, index investing is on the rise for a good reason. Berkshire Hathaway chairman and CEO Warren Buffett is a strong backer himself. "Consistently buy an S&P 500 low-cost index fund. I think it's the thing that makes the most sense practically all of the time," he told CNBC. A 2013 study by Rick Ferri and Alex Benke found that index investing outperformed similar active strategies anywhere from 80-90% of the time. In the overwhelming majority of cases, taking the market returns produced better results than trying to actively beat the market. Q Smart Limited suggests one of the biggest reasons this method is so effective is due to its low overall cost. Indices are often among the cheapest investments available because generally they don't require a portfolio manager who needs to be paid regularly. They also don't rack up all the trading costs, taxes, and other expenses that are usually involved with more active strategies.
Diversification is always suggested with serious investors, allowing them to decrease risk without diminishing expected returns. Index funds are an easy way to accomplish this because they invest in entire markets, and hold every stock in an index such as the S&P 500, including many well known entities such as Apple, Microsoft and Google. This encourages them to stay relatively constant, largely sidestepping the risk that comes with choosing individual stocks. Consistency is another distinct advantage these funds offer, which can be a breath of fresh air for those accustomed to volatile market activity. Indices make it easier to stay consistent as well as avoid all the speculation and stress associated with other strategies. They often involve selecting a few different funds to follow within a small amount of corresponding markets, so there isn't much to alter.
A joint venture of financial and e-commerce experts, Q Smart Limited is a leading source of contracts for difference (CFDs) on currencies, indexes, commodities, and stocks. The firm has been providing their services for more than 17 years, with an emphasis on trading in financial products on over-the-counter (OTC) and organized stock markets. With a team of more than 200 trading specialists operating from offices in Auckland, Hong Kong, Tel Aviv, Oslo, and Sao Paulo, the company remains dedicated to supporting retail and institutional customers in executing successful transactions while achieving maximum profitability, with the backing of advanced technological solutions and strong liquidity.
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SOURCE: Q Smart Limited