They track a broad market, so one purchase gives instant diversification without stock-picking stress.
Key Takeaways
- Buy the whole market, not one stock
- Low fees compound in your favor
- Consistency beats timing
Why Index Funds
They track a broad market, so one purchase gives instant diversification without stock-picking stress.
Fees Matter More Than You Think
A 1% fee sounds small but can cost a third of returns over 30 years. Choose low-expense funds.
How to Begin
Open a brokerage or IRA, buy a total-market fund, and automate monthly contributions.
Quick Comparison
| Fund Type | Holds |
|---|---|
| Total US market | All US companies |
| S&P 500 | 500 large firms |
| Total international | Global ex-US |
Frequently Asked Questions
Are they safe?
Safer than single stocks but still fluctuate – they fall in crashes and recover over time.
How much to start?
Many brokers allow starting with a small amount thanks to fractional shares.