Education - Step 1 : Active Investors

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Welcome to the 12 Step Program to Index Funds. We start the journey by asking, "what is an active investor?" Step 1 helps you recognize the behaviors and thoughts of active investors. The first indication of an active investor is a stressed disposition and a below market performance. Your answers to the following questions may help determine if you are an active investor:

• Do you own or plan to own actively managed mutual funds?
• Do you think that you can pick stocks that outperform a market?
• Do you think that there are times to be in a market and times to be out of a market? In other words, do you try to time the market?
• Do you think that actively managed mutual funds with the best track records are the ones to buy?
• Do you think that you can predict when large value will outperform large growth stocks?
• Do you believe that NOW is the best time to invest in certain sectors, such as ealthcare, technology, large cap or small cap stocks?
• Do you invest without considering your Risk Capacity™?
• If you own index funds, are you primarily invested in the S&P 500, thinking you are sufficiently diversified?
• Do you keep a stash of Rolaids close at hand?
• Have you invested without first reading the academic research that explains how the market works?

If you answered YES to any of these questions, you are engaging in active investing and can benefit greatly from this 12-Step Program.