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. This has the top 500 companies in the U.S.A.
Index fund investing is not brand new. The first index fund came out in 1976. The invention was a revolution to allow average joes to create wealth passively.
Index fund investing gives people a lower cost. Most actively managed funds would have a higher expense ratio than an index fund. With a low expense ratio, these index funds offer savings. The money can compound more over time with fewer fees.
By using index fund investing, your portfolio will be able to own all the top stocks out in the market like Apple and Microsoft. With a fund that tracks the index, you will have the ability to own them all.
1. VTSAX: Vanguard Total Market Index Fund 2. VFIAX: Vanguard S&P 500 Index fund 3. FZROX: Fidelity Zero Total Market Index Fund 4. SWPPX: Schwab S&P 500 Index fund
When you are thinking of your portfolio, you need to consider a couple of things to make the right decision for yourself. My way is not the best way for you, so make sure to consider these factors when investing.