An index fund is a mutual fund or ETF that tries to match — not beat — a market index like the S&P 500 or Total US Stock Market. No active manager picks stocks; the fund simply owns everything in the index.
Over 15+ year periods, roughly 85–90% of actively managed US equity funds underperform their index benchmark after fees. For a retiree, this is the highest-probability investing decision you can make: stop paying for active management and buy the index.
An ETF is a basket of securities (stocks, bonds, or both) that trades on an exchange like a single stock. Most ETFs passively track an index…
A mutual fund pools money from many investors to buy a portfolio of stocks, bonds, or both. Shares are priced once per day at the net asset …
A stock is a fractional ownership share in a publicly traded company. Stockholders benefit when the business grows (price appreciation) and,…
A bond is a loan you make to a government or corporation. In exchange, the issuer pays you periodic interest (coupon) and returns your princ…