They're the ultimate 'set and forget' investment
Index funds are investments in a broad selection of stocks. Rather than choosing and buying individual stocks, an investor owns a small piece of every company or asset in the fund. An S&P 500 index fund, for example, tracks the 500 largest US companies, including Google, Microsoft, ExxonMobil, and General Electric. One of the biggest index funds,, tracks a much larger selection of stocks from large, mid-sized, and small companies.
"You can also buy different types of funds based on your goals," Rosa said."For example, if it's a retirement goal, you can buy awhich invests more aggressively at the beginning and it gets more conservative as you get closer to retirement age. It automatically rebalances so you don't need to be an expert at buying and selling."
Index funds are particularly attractive for their low fees. These funds are not actively managed — you're not paying someone to buy and sell your shares in order to beat the market. Instead, each fund is designed to match the market, so total operating costs — otherwise known as an expense ratio — should be low. The
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