Originally Posted by La literatura
Interesting. I take it that managed mutual funds are directed then towards consumers who want to have more input in what goes in the basket. But for a person who doesn't have ties to financial and business trends, the index fund is a better way to go, in general.
The consumer has no input over what goes into the basket, it's managed by the mutual fund manager.
You can, of course, directly buy/sell specific stocks. I typically avoid that myself, as I have neither the time nor the skill.
Index funds are generally the better way to go.
There are a hundred million books on these topics, but one very good one that lays out a simple, straight-forward intelligent plan is this one, written by a Wharton professor, which is now on its 12th edition or whatever. It's sort of "timeless" advice for effective investing.