A Guide to Investing in an Index Fund

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The decision to buy stocks, index funds, and other investments can be a great way to build wealth over a long period.

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Many investors decide to invest in the S&P 500, via an Index Fund, as a way to diversify their portfolio and earn money for savings and retirement.

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Buying stock is a great way to have an ownership stake in a business without buying a company altogether. Doing this can grow your saved money while you are at your day job.

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A company’s stock usually trades (gets bought and sold) on a stock exchange. A couple common exchanges would be the New York Stock Exchange (NYSE) or the NASDAQ.

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Buying Index Funds

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Unlike mutual funds that are actively managed according to various strategies, the index fund requires very little management.

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For example, 500 stocks are in the S&P 500. The index weighs these stocks determines the stock’s percentage in the fund based on its market capitalization.

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A Guide to Investing in an Index Fund

The decision to buy stocks, index funds, and other investments can be a great way to build wealth over a long period.

Many investors decide to invest in the S&P 500, via an Index Fund, as a way to diversify their portfolio and earn money for savings and retirement.

Buying stock is a great way to have an ownership stake in a business without buying a company altogether. Doing this can grow your saved money while you are at your day job.

Buying Stocks

A company’s stock usually trades (gets bought and sold) on a stock exchange. A couple common exchanges would be the New York Stock Exchange (NYSE) or the NASDAQ.

Buying Index Funds

An index fund a mutual fund whose holdings exactly match that of a stock index.

Unlike mutual funds that are actively managed according to various strategies, the index fund requires very little management.

For example, 500 stocks are in the S&P 500. The index weighs these stocks determines the stock’s percentage in the fund based on its market capitalization.

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