Are Small-Cap and Emerging-Market Funds a Good Idea?

In this edition of The Motley Fool's "Ask a Fool" series, Motley Fool One analyst Jason Moser and Motley Fool Stock Advisor analyst Brendan Mathews take a question from a reader who asks: "Are small cap, and emerging market index funds good idea, or are these two areas where the expertise of a managed fund is worth the cost?"

Brendan is skeptical of the idea that investors need an active manager for U.S. small-cap stocks, and Jason points out the diversity benefits of an index fund. As for emerging-market stocks, Brendan believes this is an area where active management may add value, as the big emerging index funds tend to be heavily populated with large state-owned enterprises that consider serving stockholders a secondary priority. Jason points out an alternative strategy for gaining exposure to emerging markets -- global blue chips with exposure to these markets.

So what's the best investing strategy?
It's no secret that investors tend to be impatient with the market, but the best investment strategy is to buy shares in solid businesses and keep them for the long term. In the special free report "3 Stocks That Will Help You Retire Rich," The Motley Fool shares investment ideas and strategies that could help you build wealth for years to come. Click here to grab your free copy today.


Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 2864845, ~/Articles/ArticleHandler.aspx, 7/22/2014 6:36:05 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 17,113.54 61.81 0.36%
S&P 500 1,983.53 9.90 0.50%
NASD 4,456.02 31.31 0.71%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

7/22/2014 4:00 PM
AAPL $94.72 Up +0.78 +0.83%
Apple CAPS Rating: ****
KO $41.19 Down -1.21 -2.85%
Coca-Cola CAPS Rating: ****
MCD $96.27 Down -1.28 -1.31%
McDonald's CAPS Rating: ***
SBUX $78.74 Up +1.13 +1.46%
Starbucks CAPS Rating: ****

Advertisement