Simple Investing with Index Funds | Ep. 5 | Winenance Wednesday
Updated: Nov 14, 2020
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What you’ll learn in this episode:
1. Why Index Funds Are Simple & Effective
When you understand the stock market always (eventually) goes up, then you understand why Index Funds are one of the best investments.
You'll always perform as well as the market.
2. What is an Index Fund?
Index Funds are a type of investment fund which tracks a particular sector or index (i.e. Financial Sector, Tech Sector, or S&P 500).
They can be passively managed or actively managed, though passively managed tend to perform better.
Index funds allow you to own a small portion of many (or all) the companies in that index or sector.
3. Index Funds are Already Diversified
Index funds offer diversification and minimal risk in one simple package.
Index Funds which track the S&P 500 or total U.S. stock market have enough international exposure due to the globalization of many of the companies within the fund.
4. Index Funds are (typically) "Low-Risk" Investments
Broad market index funds can take the “lose it all” fear out of investing.
Index Funds are "self-cleansing" meaning if one company fails, there's another ready to take it's place in line.
Challenge of the Week
Get out of your comfort zone!
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