If you are searching for a positive and productive investment idea that will allow your money to work for you while you sleep, you should consider placing your money into an interest-bearing, low-fee index fund. In researching these types of mutual funds, you will find that there are a lot of rave reviews. Index funds allow investors a low-cost method to track the most popular bond and stock market indexes. According to statistics, most index funds have the unique ability to completely outperform most of the mutual funds that are currently available and actively managed. For example, the Vanguard 500 Index (VFINX) recently ranked in the top 19% of the large-cap mutual funds, and the top 21% for the past five years, as of the end of September, 2014. Instead of physically working for your money and trading your precious time for it, why not invest your money and allow it to work FOR YOU?!? By investing in an interest-bearing, low-fee index fund, you can do just that! Continue reading if you are ready to change your life, for the better!
Index Funds at a Glance
Before electing to invest in an index fund, it is first important to ensure that you know all of the basics associated with your investment. An index fund is a type of mutual fund that is uniquely designed to mirror the basic performance of one of the major or top indices. Examples of the top-rated indices include the S&P 500 and the Dow Jones Industrial Average. Index funds are only passively managed, which is much different than traditional funds that are actively managed by portfolio managers that consistently evaluate investments, analyze investments, and acquire various stocks. Ultimately, this means that index funds are made up of a pre-selected set or group of unique stocks that – very rarely – experience any changes.
By conducting a simple search of investment tips, you will discover that index funds are extremely popular. Ultimately, the attraction is the performance level of such funds. According to historical figures, index funds are more productive than managed mutual funds. As an example, we will take the Vanguard 500 Index. This has out-performed over 80% of all stock funds of large companies in the United States for several years in a row. Additionally, these are inexpensive funds. The largest of all the index funds currently available, “Vanguard Total Stock Market Index” (VTSMX) only charges about 0.17% annually. The expense ratio is only 0.06%. The managed stock funds expense ratio in the United State is approximately 1.32%. In addition to performance and being cheap, you are completely aware of what you get when you invest in such a fund. When making an investment, it is always important to know the holdings within the investment that you are making. When it comes to index funds, these are clearly outlined and transparent.
Regardless of what you read when it comes to investment tips, you are sure to always find that investing in an interest bearing, low-fee index fund is considered to be an ideal investment. Not only is it a sound and secure investment, but, it has the potential to yield a large amount of profits. This type of investment allows you to spend a small amount of money and experience a large amount of profits. Best of all, the fund does not have to be managed. It simply makes money while you sleep! By making an investment in low-fee index funds today, you are sure to experience many profitable tomorrows!