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4 Passive-Investing Pitfalls to Avoid

Don't assume all index funds are low cost and tax-efficient, and avoid overdiversification and becoming too hands-on, says Morningstar's Mike Rawson.

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Note: This video is part of Morningstar's April 2015 Active, Passive, and In-Between special report.

Christine Benz: Hi, I'm Christine Benz from Morningstar.com. A portfolio of index funds or exchange-traded funds might be easier to set up and maintain than a portfolio of actively managed funds, but it's not foolproof. Joining me to share four common mistakes that investors might make with index products is Michael Rawson; he's an analyst with Morningstar.

Christine Benz does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.