The Stock Market: Index Funds

Index funds are mutual funds (groups of stocks) that reflect an index (like the S&P 500, Dow Jones, NSDQ, etc.). Usually index funds have lower expenses associated with them because there isn't a lot of work required of the fund manager because he/she doesn't have to pick the stocks but simply gets stocks that represent the entire index. That means you'll be paying less of your money to have the fund managed.

Benefits of Index Funds

Besides the lower fees associated with index funds there are a few other advantages to going this route. First, your fund will mirror the market so it is easy to know whether or not you are making money simply by knowing if the economy is doing well or not.

Links

• IndexFunds.com - 12 steps to investing in index funds
• Wikipedia.com - A lot more information about indexing, the history of index funds, etc.