Money Rule #5 – Buy Inexpensive, Well-Diversified Indexed Mutual Funds and Exchange-Traded Funds
As a followup to Money Rule #4, Never Buy or Sell Individual Stocks, investing in diversified Mutual Funds and Exchange Traded Funds (ETFs) is a cost-effective way to manage risk. An index fund is a “basket of stocks” that matches or tracks a market index, such as the Standard & Poor's 500 Index (S&P 500). They typically offer lower operating expenses than an actively managed mutual fund.
There are many platforms and advisors who can explain and provide these types of investments. Your job is to be an informed consumer when you are looking to place your next investment. We are always available to help you navigate these important decisions.
(Inspired by: “The Index Card: Why Personal Finance Doesn’t Have To Be Complicated” by Helaine Olen and Harold Pollack; Random House, 2016)