How to Invest in Index Funds: A Beginner’s Guide
An index fund is an investment that tracks a market index, typically comprising stocks or bonds. Index funds generally invest in all the components of the index they track and have fund managers to make sure that the index fund performs the same as the index.
Steps to take
1. Pick an index
There are hundreds of indexes you can track using index funds. The most popular index is the S&P 500 index, which includes 500 of the top companies in the U.S. stock market. Here’s a short list of some additional top indexes, broken down by which part of the market they cover:
In addition to these broad indexes, you can find sector indexes tied to specific industries, country indexes that target stocks in specific nations, style indexes…
