Thread: help needed
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Old 07-23-2005, 01:34 PM
Sniper Sniper is offline
Senior Member
Join Date: Jun 2005
Posts: 704
Default Re: help needed

Could someone please explain to me what exactly an index fund is?

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An index fund is a very low fee mutual fund that invests in the basket of stocks that are included in a stock market index (like the dow, s&p, nasdaq 100, etc). The funds returns will be very close to the return of the actual index it represents.

As far as your plan goes...

One of the key questions to ask yourself is how much TIME are YOU willing to invest in making your investments grow?

If the answer is none, then stick your $$$ into an index fund and receive market level returns over the long term.

If the answer is a couple of hours a month, then do some research on the top performing mutual funds.

If the answer is a few hours a week, then do some research on long term individual winning stocks.

If your answer is a few hours a day, then do some research on taking advantage of short term market inefficiencies.

There are many other factors that need to be considered, but you should probably pick up an intro book on personal finance and another on basic stock market investing, so that you'll at least have the basic knowledge to understand the answers you receive.

If you are young (which I assume you are), I highly recommend David Bach's The Automatic Millionaire, which I believe should be required reading in high school.
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