Why Index Funds?
Index funds track a market index like the S&P 500, giving you instant diversification across hundreds of companies. They have lower fees than actively managed funds and historically outperform most active managers.
Benefits of Index Investing
- Low costs: Expense ratios as low as 0.03%
- Diversification: Own hundreds of stocks in one fund
- Simplicity: No stock picking or market timing needed
- Tax efficiency: Low turnover means fewer taxable events
- Proven results: Beats most active managers over time
Popular Index Funds
- Total Stock Market: VTI, FSKAX - entire US stock market
- S&P 500: VOO, FXAIX - 500 largest US companies
- International: VXUS, FZILX - stocks outside US
- Bond Index: BND, FXNAX - diversified bond exposure
Getting Started
- Open a brokerage account (Fidelity, Vanguard, Schwab)
- Decide on your stock/bond allocation based on goals
- Set up automatic monthly investments
- Rebalance annually to maintain target allocation
- Stay the course through market ups and downs