(ThePennyWatcher.com) – Index Funds are a great way to get involved in the stock market overtime while limiting any crazy risk.
Index Funds are an assortment of highly performing companies that are grouped together, and your investment is most likely associated with a specific sector of the market.
So the Index would be associated with a sector, such as technology, and the fund would be specific to an individual company or stock.
These funds are created to provide passive investment strategies for individuals, and you don’t need to be directly involved in the specific companies, you just need to monitor the entire fund and follow its progress.
Of course there are ups and downs, but many folks choose Index funds that perform very well overtime, and look to establish a mature fund in the market.
The market will endure it’s ups and downs, but the clever thing about these funds is that they are built to withstand the turbulence.
SPIVA is a part of the S&P, and reports that only 30% or so of managed funds actually beat the overall market in recent years.
In fact, advisors often underperform the market, while index funds have worked to match it!
And they cost less on average!
A basic example is The S&P 500 Index which is targeted by a variety of platforms. Many of these have no minimum costs, so you can into the game very easy.
While this is fairly straight forward information, there is more involved that you should research when choosing a fund, but there are plenty of resources.
YouTube has a host of financial gurus that provide some pretty knowledgable information to get started, and of course it’s free.
Take an hour and learn the basics.
By tomorrow, you could have your own Index Fund start working for you.
Good luck!
