As a long-term investment strategy, is it possible to "lose" by investing in index funds?

My thinking is as follows. As a long-term investment strategy (say, buying --- and buying regularly --- and holding for a period of 20 years or longer): a) it is possible to "win" by investing in index funds, b) it is possible to "win" even bigger by investing in actively-managed mutual funds (or by handpicking stocks), however, c) it is also possible to "lose" by investing in actively-managed funds. So, d) is it possible to "lose" by investing in index (i.e., passively-managed) funds, or is investing in them a no-brainer despite the potential bigger gains of actively-managed funds?

As a long-term investment strategy, is it possible to "lose" by investing in index funds?
While managed funds can POTENTIALLY outperform index funds, the fact of the matter is that most don't over the long term. Given that there has never been a 15-year period where the stock market has lost value, the odds are very good that you won't lose money with a 20-year investment in index funds. Is it possible? Sure, nothing's guaranteed. But it's very unlikely, based on history.
Reply:All investments are risk driven. The higher the risk the higher the potential dividend. The lower the risk means the likelihood of lower returns.





You're looking for a black and white answer in a world (investing) filled with shades of gray. The best answer I can give you is all of the above.





It is possible to win and it is possible to lose given your four criteria. There are many sound rules to investments and investing. I won't go into them all here because you only asked a specific multiple choice question.





But I will leave you with two very important principles. The bigger the front the bigger the back. Many things are not what they appear to be.
Reply:Very few actively managed funds beat the long term average of the S%26amp;P over a 10 year period or since inception. Don't look at the 1 yr and 3 yr returns. Invest in a passive index and occationally put money in individual stocks that you believe will beat the index.
Reply:Historically index funds over a 10 year period will yeild 10% per year growth. But of course you can loose investing in them as with any stock. Take 9/11, the market dove and so did the index funds. So if you had to sell your funds that you purchased prior to 9/11 shortly after 9/11 you would have lost. They did, however recover + and now are at an all time high. In short, index funds are one of the safest long term investments one can make if one wishes to be in the stock market environment





Good luck