what are the index funds and why they are good for beginners ?

Answer 1

There are litterly hundreds of index funds available for the investors. Here is a nearly complete listing of them.

http://www.etfconnect.com/select/rank/default.asp?fType=2&oType=5

The darn things keep popping up so fast, it is difficult to know what they all are currently.

Their claim to fame as opposed to managed mutual funds are that they have very low expense ratios, some less than 0.2% whereas managed mutual funds are seldom below 1.0% and the holdings are not churned as they are in many managed mutual funds, which mean ones realized capital gains on which taxes must be paid are much less.

As for being good for beginners, they may or may not depending on which ones are selected for investment by the beginner as with any mutual funds.

Answer 2

You don't have to go into an index fund just because you are a beginner. Index funds buy all the stocks on an index and are mostly unman aged. You will do as well as that index. But You can go into any fund you want and let them manage your money. I like Vanguard Equity Income Fund it is well managed ans has done very well for its investors. You pay no commissions and get a div every 3 months. Go to Vanguard . com they are very good and they have many funds and they can help you if you want to invest.. good luck.

Answer 3

Index funds buy a large amount of stocks on some sort of index, like the S&P 500 stocks, Down Jones Industrial (30) or the total stock market fund which buys all the stocks in the US exchanges.

That way, you can invest in one thing, the fund, but invest in all the various stocks carried in that index. The most popular for mutual funds would be the S&P 500.

Answer 4

Index fund is where people pools their money for professional to make investment in the stock market. Usually index fund try to track a particular index by buying most of the stocks in the particular index. It's good for beginner because of its diversified risk