Investing in Index Funds

<p> It is believed that the market itself performs exceptionally well, with the biggest companies being very good leaders. The main indexes pick the best of the companies in their respective exchanges.</p> <p> The two super exchanges are the New York Stock Exchange and the Nasdaq Stock Exchange.</p> <p> The New York Stock Exchange index is the Dow Jones,&nbsp;and there are 30 companies in the index.</p> <p> The Nasdaq Exchange uses its’ own index, which has the top 50 and 100 companies.</p> <p> By picking the top companies in both exchanges, a person would get similar results to these indexes.</p> <p> The S &amp; P put the Dow Jones and the Nasdaq together and uses a few other companies in order to figure out how the whole United States is doing.</p> <p> The S &amp; P has historically gone up about 7-8% annually over the last few decades. Therefore, if an investor was to buy a basket of these stocks by purchases some Mutual Funds and ETFs, they would increase their portfolios at around this percentage over a long period of years. In fact, it has been figured out that about 80% of people don’t make as much doing it their own way while only about 15% beat this method. Around 5% come close to this mark.</p> <p> Therefore, one of the safest ways to get a decent return over a long period of years is to simply buy mutual funds of the main indexes: The S &amp; P, Dow Jones and Nasdaq.</p> <p> Of course, there are simply many people who wish to attempt to beat the indexes or like to buy certain stocks because they like them, or they have consistently beat the 7-8% average.</p> <p> Then there is the option of buying stocks that consistently average about 7-8%, but they give out dividends. The dividends then create an extra bonus,&nbsp;and they could be 2-3 percent more. Over many years this amount could become quite a lot of money.</p> <p> This strategy will work so long as the mutual funds/ETFs are actual Dow, Nasdaq or S &amp; P based index funds.</p> <p> Don’t mix them up with mutual funds/ETFs that use the major companies in the indexes. They must be based completely on the indexes. The difference is that a manager may use most but not all stocks, but they may buy them in different percentages or vary them in some other manner. They need to be index mutual funds/ETFs.</p> <p> In other words, this should be one strategy that is employed as part of anyone’s portfolio.</p> <p> &nbsp;</p> <p> DB</p>

<p> It is believed that the market itself performs exceptionally well, with the biggest companies being very good leaders. The main indexes pick the best of the companies in their respective exchanges.</p> <p> The two super exchanges are the New York Stock Exchange and the Nasdaq Stock Exchange.</p> <p> The New York Stock Exchange index is the Dow Jones, and there are 30 companies in the index.</p> <p> The Nasdaq Exchange uses its’ own index, which has the top 50 and 100 companies.</p> <p> By picking the top companies in both exchanges, a person would get similar results to these indexes.</p> <p> The S &amp; P put the Dow Jones and the Nasdaq together and uses a few other companies in order to figure out how the whole United States is doing.</p> <p> The S &amp; P has historically gone up about 7-8% annually over the last few decades. Therefore, if an investor was to buy a basket of these stocks by purchases some Mutual Funds and ETFs, they would increase their portfolios at around this percentage over a long period of years. In fact, it has been figured out that about 80% of people don’t make as much doing it their own way while only about 15% beat this method. Around 5% come close to this mark.</p> <p> Therefore, one of the safest ways to get a decent return over a long period of years is to simply buy mutual funds of the main indexes: The S &amp; P, Dow Jones and Nasdaq.</p> <p> Of course, there are simply many people who wish to attempt to beat the indexes or like to buy certain stocks because they like them, or they have consistently beat the 7-8% average.</p> <p> Then there is the option of buying stocks that consistently average about 7-8%, but they give out dividends. The dividends then create an extra bonus, and they could be 2-3 percent more. Over many years this amount could become quite a lot of money.</p> <p> This strategy will work so long as the mutual funds/ETFs are actual Dow, Nasdaq or S &amp; P based index funds.</p> <p> Don’t mix them up with mutual funds/ETFs that use the major companies in the indexes. They must be based completely on the indexes. The difference is that a manager may use most but not all stocks, but they may buy them in different percentages or vary them in some other manner. They need to be index mutual funds/ETFs.</p> <p> In other words, this should be one strategy that is employed as part of anyone’s portfolio.</p> <p>  </p> <p> DB</p>