September 30, 2022
By : Quick Insurance Guru
Among investors are index funds because they guarantee ownership of a large range of stocks.
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Because of this, many investors, especially novices, believe that index funds are a better investment than individual equities.
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1. Attractive returns
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The S&P 500 has a long-term average return of roughly 10% each year.
1. Attractive returns
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Index funds have a history that averaged well over time.
2. Diversification
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Index funds are preferred by investors because they provide quick diversification.
2. Diversification
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A share of a fund based on the S&P 500 gives ownership in hundreds of companies.
3. Lower risk
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Investors can invest in a fund that has invested with a low risk because it is more diversified.
3. Lower risk
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The index may vary a lot less than an individual stock.
4. Low cost
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Index funds can charge little for these advantages. One will pay $3 – $10 annual for every $10,000 in funds invested in.
4. Low cost
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One of the funds has no expenditure ratio. There are many factors that affect the total return.
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Why are index funds a popular investment?