Index investing is a great strategy for beginners. It takes the complexity out of stock picking because you are buying the overall stock (or bond) market, not individual stocks. It guarantees your returns will be similar to the market you are looking to mirror (i.e., the S&P 500).
Many expert investors, like Warren Buffett, agree with and promote index investing. As Buffett told CNBC, “Consistently buy an S&P 500 low-cost index fund… I think it’s the thing that makes the most sense practically all of the time.”
Oh, and that was after Buffett won a $1 million bet against a hedge fund. He won that bet by beating the returns of the hedge fund over a ten year period by investing in, you guessed it, an index fund.
We’ll provide more details on why index investing works and how to get started, but first, what even is index investing?[Read more…] about What is Index Investing: A Beginner’s Guide