You don't have to enjoy investing to do it well. In fact, some of the best investors are the ones who barely think about it at all.
That sounds backwards. Isn't investing supposed to reward attention, research, and having a view on where the market's headed? For picking individual stocks, maybe. For building actual long-term wealth, the evidence points the other way.
What an Index Fund Actually Is
An index fund is a single investment that holds a slice of hundreds or thousands of companies at once, weighted to track a market index like the S&P 500. Instead of betting on which company wins, you own a piece of the whole race.
You're not trying to beat the market. You're buying the market, at a fraction of the cost of hiring someone to try to beat it for you.
Why "Boring" Wins
Actively managed funds, the ones with a manager picking stocks and trying to outperform, charge higher fees to do it. The problem is the track record. Over any 15-year stretch, the large majority of actively managed U.S. stock funds fail to beat a simple S&P 500 index fund, according to S&P's own annual scorecard on the subject.
The fees are the quiet killer. A fund charging 1% a year sounds small until you compound it. Over 30 years, that 1% can eat a meaningful chunk of your total returns, money that was never lost to a bad call, just handed over in fees for a bet that usually didn't pay off anyway.
The Actual Case for Index Funds
- Lower fees. A broad index fund can run 0.03% to 0.1% a year in costs, versus 0.5% to 1%+ for many active funds.
- Instant diversification. One purchase spreads your money across an entire market instead of a handful of individual bets.
- Nothing to manage. No stock picks to monitor, no earnings calls to track, no decision fatigue every time a headline hits.
- It matches the actual goal. Most people investing for retirement don't need to beat the market. They need it to compound steadily for decades.
What This Doesn't Mean
Index funds still go down. A broad market index fund fell alongside everything else in 2008 and again in 2020. "Boring" doesn't mean "risk-free," it means the risk you're taking is the market's risk, not the added risk of a single manager's judgment on top of it.
It also doesn't mean there's nothing to decide. You still need to pick which index (total market, S&P 500, international), how much to hold in stocks versus bonds, and where to actually hold the account. Those decisions matter. Picking individual winning stocks generally doesn't need to be one of them.
The Practical Version
If investing has felt like something you're supposed to have strong opinions about, and you don't, that's not a gap in your knowledge. A low-cost, broad-market index fund, held consistently over time, is a legitimate strategy on its own, not a placeholder until you get "serious" about investing.
Boring, in this case, is the feature.
If you're investing from Canada, Wealthsimple is a straightforward, low-fee platform built for exactly this kind of "buy the index and leave it alone" approach. See our full resources list for more.
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Spicy Investing