An index fund is a type of mutual fund that is passively managed to mirror an index. One of the most popular indexes around is the S&P 500 index.
The first index fund came out in 1976. The invention was a revolution to allow average joes to create wealth passively without having a fund manager take 1-2% of their money every year
With a low expense ratio, these index funds offer savings. The money can compound more over time with fewer fees. That means you can grow your money faster and to a more substantial amount.
If you are looking for diversification, look no further, these index funds provide plenty with large-cap and even mid-cap and small-cap companies. If one company fails, more companies may take its spot or rise up.
Investing is not always easy. It is simple with index fund investing, but it takes conviction to know what you are doing. With the index fund, you can worry less about your investments.