According to the efficient market hypothesis index funds should be the best way for the average person to gain a return from investment. Now there is a plethora of indices to invest in. How should one find the 'best' one?
Further, only a relatively small part of return generating assets are captured in publically tradeable assets. What about private equity and real estate, huge parts of the economy?
IIRC real estate prices in the US rise about 1% per year inflation adjusted while stock markets rise about 7 % on average. An average person needs a huge loan to invest in real estate and go all in which means zero spread of risk. Real estate is also relatively illiquid not only because of practical reasons but because the return of investment depends on timing of the transaction. You're shit out of luck if you need money while the price of your house is plummeting.
How should one find the 'best' one?
Depends on your risk tolerance. The bigger the index...
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