This is Motley Valancers. I'm Alison Southwick and I'm joined as always by Bertrand Brocamp,

personal finance experts here at the Molly Fool. That's not even what I meant to say, but whatever.

Move on. In this week's episode, Bro interviews Andrew Scott and Linda Grattan, authors of The New Long

Life, a framework for

flourishing in a changing world. All that and more on this week's episode of Motleyful answers.

So, Alison, what's up?

Well, Fro, the two-handed economist is back. For those of you who know us, you know that

the Motley Fool is a fan of bottoms up, long-term,

buy and hold investing. As retail investors, we believe your best option for building wealth

is to invest in great companies that you believe in and hold onto them as the stock price

might hit some bumps and blips at the whimsy of the market. Oh, wait, there's an asterisk to this.

We also think index funds are great. If you don't have the time and temperament to invest in

individual stocks, then set it and largely forget it with a well-diversified portfolio of

index funds. Well, it's a great option. So index funds are great. But on the other hand, are index funds of the devil?

So Bro has talked about the basics and history of the index fund on the show before, but let's just remind ourselves. Index funds were the brainchild of Jack Bogle. He's the founder of Vanguard. He asserted that mutual funds at the time charged

exorbitant fees and often delivered lousy returns. What a great combination. His idea was that

instead of paying a premium to a money manager who tried to beat the market by choosing stocks,

him or herself, you could just pay a much smaller fee to someone

like Vanguard who will simply mirror an index like the SMP's holdings. You'll likely come out

ahead because the actively managed fund needs to perform even better than the market, something

that's already hard to do, and make up for the higher

fee they are charging you. So first launched in the 70s, index funds took a while to gain steam,

...