If you don't have a finance background and want to build generational wealth for yourself and your family, read this:
• Index investing
It is a passive investment strategy that seeks to replicate the returns of an index.
By mimicking the index composition, the fund will match its performance.
Since you can't invest directly in an index, index funds are created to track their performance.
These index funds (Mutual funds and ETFs) allow investors to be exposed to a variety of securities while replicating the performance of the indices.
An example of a market index is the S&P 500, the Nasdaq, or the Dow Jones industrial average.
• Why buy index funds?
They are the simplest way to access the stock market.
Advantages:
• Time saver: You don't need to research individual stocks
• Low fees: Less costly than actively managed funds
• Low risk: Index funds are less risky than individual stocks
• Diversification: Index funds hold hundreds and thousands of companies
• Fewer Taxes: They are tax-efficient. They do not trade a lot, avoid generating capital gains, and lower their tax bills
• Great returns: Over 80% of active managers fail to beat index funds
