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Unformatted text preview: Mutual fund (diversification) and index funds Mutual funds actively managed in order to maximize growth on certain industries Managers believe they are above EMH Index fund – financial instrument that buys common stocks across an entire market index Indices do not actively manage stocks, proportionate investing across the market. Investment mistakes no Econ 201 student should make No investment strategy based on publicly available information can beat the market because all information is rapidly reflected in share prices after becoming public. Burton Malkiel – A Random Walk Down Wall Street Inefficient Markets by Andrei Schleifer...
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- Fall '08
- Active management, EMH, Index fund