Skip to main content

Questions tagged [index-fund]

to be used for any questions related to Index funds. The question should clearly state the Index in question [Nasdaq,LSE] or the fund house in question. If the question is generic with the intention to understand how the funds work, then a specific example should be quoted to get a better answer.

Filter by
Sorted by
Tagged with
72 votes
6 answers
9k views

At what point do index funds become unreliable?

Passively investing in exchange-traded funds that track some broad index is often recommended for private investors that don't have the time or expertise for active investment. In particular, index ...
henning no longer feeds AI's user avatar
65 votes
10 answers
18k views

Are Index Funds really as good as "experts" claim?

I use the quotations because generally the people touting these the most (John Bogle) are also ones selling the index funds. Being biased doesn't mean they're wrong, but it does mean they may not be ...
dcg1000's user avatar
  • 661
40 votes
7 answers
6k views

Why don’t index-tracking mutual funds corner themselves?

I don't really want to think too much about investments -- just park my surplus money somewhere and be able to come back several years later and see that it has grown. (As this question shows, I'm ...
hmakholm left over Monica's user avatar
38 votes
11 answers
12k views

Why do people claim that it's hard to outperform the S&P 500? It has only increased in value by ~1.5x in the past 5 years

Whereas companies like Google, Facebook, Netflix, Amazon, Apple have all increased anywhere from 3x-6x in value in the past 5 years. If you just stuck with those companies, you would have easily ...
Eric Gumba's user avatar
27 votes
6 answers
7k views

Why does this author claim that buying index funds will decrease index funds returns?

I'm reading The Beginners Investing Book by Matthew Kratter and to quote him directly: In the old days, very few people practiced indexing. That guaranteed that it would provide pretty good returns. ...
Linkin's user avatar
  • 713
27 votes
8 answers
5k views

Is it wise to keep some savings in a cash account to protect against a long term market crash?

My wife and I have half our savings in a low risk diversified account (WealthFront - mostly bonds, some stocks). We have the other half in a high interest cash savings account (0.35% interest). Our ...
Mary Rose Cook's user avatar
27 votes
1 answer
3k views

Will the popularity of index funds cause a pricing bubble in the stocks that make up an index?

I can't help but notice the popularity of index mutual funds over actively managed funds. I think all the arguments are sound, but I have one worry: Index funds are run by buying the stocks listed in ...
Scott Whitlock's user avatar
24 votes
3 answers
2k views

If low-cost index funds are considered the best investment, why are there so many high-cost, managed funds?

The general consensus is that the single best indicator of a fund's future performance is the its expense ratio (source). If you look for more than 5 minutes online you discover the Bogleheads ...
Dang Khoa's user avatar
  • 540
24 votes
3 answers
2k views

What differentiates index funds and ETFs?

Many companies offer index funds and ETFs. If two funds or ETFs track the same fund, what differentiates the two? Is it common for one index fund to outperform another? How can this happen if the ...
Ryan Michela's user avatar
  • 1,299
22 votes
9 answers
5k views

Why do banks give small APR loans

I apologize if this has been asked before.... If you can reasonably expect to profit 6% or more from index funds and there are other ways to make a reasonably safe 6% on the stock market.... Why do ...
xyious's user avatar
  • 2,778
21 votes
6 answers
14k views

Do index funds really have double-digit percents annual return rates?

For the first time in my life I'm looking into where to put my money and I came across index funds. I find it very suspicious that: whatever index fund I come across, the history never goes back to ...
UTF-8's user avatar
  • 922
19 votes
5 answers
2k views

Advice for college student: Should I hire a financial adviser or just invest in index funds?

I just started college and after calculating the cost for my degree I calculated that I have $50,000 that I wont need until after college. I think that the best think for me to do with that money is ...
HanMah's user avatar
  • 345
18 votes
3 answers
30k views

How does dividend work in an index fund?

What does a manager do with the dividends of the companies in the index? Does he reinvest the dividends in the company in which he got the dividends or will just choose whichever company suits him? ...
Louis's user avatar
  • 303
18 votes
4 answers
5k views

Investing in S&P500 Index Fund from India

I am an Indian Citizen residing in India. Can I invest in an S&P500 Index fund while residing in India?
Sucheta Saha's user avatar
17 votes
5 answers
2k views

Is there any benefit to investing in an index fund?

Does an index fund comprise of stocks that mimic the index? So when the index is altered to include new players/exclude old ones, the fund also adjusts? But how can this be, since index funds are not ...
Victor123's user avatar
  • 16k
16 votes
3 answers
12k views

Is buying an index ETF which contains my company insider trading?

I work for company C and in my contract I have information that I can't buy any company stocks, because it will be insider trading. However, there is an ETF which tracks an index 1:1 to which my ...
Andrew Sasha's user avatar
16 votes
7 answers
3k views

How can so many ETFs tracking the same index coexist?

I understand that different ETFs may cost different amounts of money per share, as you are buying a proportional amount of each company on the index, but why can two ETFs that cost roughly the same ...
DividedByZero's user avatar
15 votes
4 answers
2k views

Why would I want a diversified portfolio, versus throwing my investments into an index fund?

Index funds are well-known to give the best long-term investment. However, most financial planners recommend having a diversified portfolio, including components such as bonds and foreign markets. I ...
Bigbio2002's user avatar
  • 1,299
15 votes
1 answer
10k views

How do euro hedged index funds work?

I was trying to find a S&P 500 tracking fund and came across this one. db x-trackers S&P 500 Euro Hedged Index UCITS ETF. Can anyone explain what the Euro hedging means and how it is supposed ...
Roberto Fugazza's user avatar
14 votes
5 answers
6k views

Do I understand correctly that while index funds (based on S&P or Dow Jones) generally go up, it might take a decade?

This is probably a simple question, but I don't know much about investing, so here goes: Some time ago, though I can't find it again now, I read a couple of responses on this site saying that these ...
ispiro's user avatar
  • 1,253
14 votes
2 answers
3k views

How do I invest in the S&P 500?

If I want to invest $4000 in the S&P 500 stocks (which is diversified and non-risk), how do I do this?
user43894's user avatar
  • 141
13 votes
2 answers
2k views

Why is the expense ratio of an index fund sometimes higher than its equivalent ETF?

Vanguard Total Stock Market Index Fund Investor Shares (VTSMX)'s expense ratio is 0.14% whereas VTI, its equivalent ETF, has an expense ratio of 0.03%. Why is the expense ratio of an index fund ...
Franck Dernoncourt's user avatar
13 votes
3 answers
1k views

Are there index tracking funds that avoid the "buy high - sell low" problem?

An index tracking fund is a fund that buys direct stocks with a view to directly matching a particular index (e.g. the S&P500 or Russell 2000). One way to allocate assets in such a fund is to ...
Peter K.'s user avatar
  • 3,943
12 votes
4 answers
1k views

Why are some funds only recommended for investors starting out?

I am 23 years old and have been in industry for a couple years and my savings have grown to an amount whereby GIC's are no longer good enough. Since I bank with TD Canada Trust, there seems to be a ...
karancan's user avatar
  • 1,293
12 votes
5 answers
415 views

What to sell when your financial needs change, stocks or bonds?

Say I have a portfolio composed of 80% index funds, and 20% bonds. This portfolio was created under the assumption I would have a relatively large income, and wouldn't need to withdraw any funds for a ...
ripper234's user avatar
  • 2,400
12 votes
2 answers
2k views

What's the international equivalent of the common advice "just invest in an S&P 500 index fund"?

A common theme among advice for new long-term investors is to ignore investments such as actively managed funds, be wary of financial advisers and the products they sell, and instead to just put most ...
coolbob's user avatar
  • 129
11 votes
8 answers
2k views

Is Bogleheadism (index fund investing) dead?

I've always been a believer in index funds, and lately have been reading books such as The Coffee House Investor and The Lazy Person's Guide to Investing. It all makes sense to me except that the S&...
roufamatic's user avatar
11 votes
3 answers
7k views

Why index funds have different prices?

When index funds track the same index, why then do they have different prices? For example, I see a large difference between Vanguard, Fidelity, and Schwab index funds when they all track, for example,...
Rohit's user avatar
  • 305
11 votes
3 answers
2k views

Invest in (say, index funds) vs spending all money on home?

We are looking to buy our first home, and are evaluating how much of our savings to put towards the down payment of the property (or how much home to buy in general). When one has a choice, are there ...
Suan's user avatar
  • 221
11 votes
4 answers
1k views

Is an index fund a good choice for a starter investment?

As an individual that is willing to consistently invest ~100-150 dollars monthly into an investment, willing to devote an average of an hour a day to educate himself / monitor investments, what kinds ...
Victor123's user avatar
  • 16k
11 votes
4 answers
1k views

How should one structure a portfolio given the possibility that a Total Stock Market Index might decline and not recover for a long time?

It's a common financial advice to buy an index and hold it forever. Particularly, John Bogle endorsed buying an S&P 500 index and just hold it / buy more of it during bear markets so you get ...
catandmouse's user avatar
11 votes
6 answers
736 views

Entering the stock market in a poor economy

I'm sitting on a reasonable pile of cash, earning negligible interest in a bank savings account. After determining that I can live without this money for 5-10 years, I decided it would be best put ...
Fixee's user avatar
  • 4,526
11 votes
1 answer
2k views

First time investor wanting to invest in index funds especially Vanguard

I am a first time investor. I would like to invest small and gradually build up depending on how I fare in the stock market. I've been following the stock market for a couple of years and have read up ...
Gabbar's user avatar
  • 523
11 votes
3 answers
2k views

How to actually invest in an index fund?

I'd like to invest in an index fund. Let's say I am able to read and understand the various documents that each fund provides, so that I can make an informed choice of what I am doing. Let's say that ...
Svalorzen's user avatar
  • 467
11 votes
3 answers
28k views

How do I compare my investment portfolio against the S&P 500?

My investment portfolio is made up of several stocks, mutual funds, and bonds I've put money into over the years. My question is: If I had put all of my investments over the years into a S&P 500 ...
zippy's user avatar
  • 407
11 votes
2 answers
1k views

Assessing the value of an ETF

I recently read through Graham's The Intelligent Investor and am looking at what index ETFs or Index Mutual Funds it makes sense for me to invest in. As I was considering this I realized that, at ...
vossad01's user avatar
  • 233
11 votes
1 answer
1k views

Index mutual fund "minimum initial investment" inside a Roth IRA?

When a fund says its minimum initial investment amount is $2500, does that mean I need $2500 in my Roth IRA account to trade that fund? If so, would I need $7500 total in my Roth IRA account to trade ...
kidonchu's user avatar
  • 285
11 votes
1 answer
354 views

Is there a catch on this structured derivative product?

I have a friend who is looking at purchasing this derivative product from JPMorgan. It looks more or less like it's pretty difficult to lose ( ie. not do better than investing in a plain s&p ...
David's user avatar
  • 272
10 votes
5 answers
3k views

How can I invest in an index fund but screen out (remove) certain categories of socially irresponsible investments?

I currently invest in index funds (VFINX and FUSEX) but would like to negatively screen out certain categories of investments for the purposes of "Socially responsible investing". I don't have any ...
gene_wood's user avatar
  • 203
10 votes
5 answers
2k views

More money towards down payment versus long-term investments

Background: I am married with no kids (but anticipating them at some point) and no debt at all. My spouse and I have an emergency fund, both fully fund our retirement accounts, and are also keenly ...
justkt's user avatar
  • 4,114
10 votes
1 answer
1k views

My first 401k, starting late-ish - should I stick with target date? [closed]

I just got my first "big boy" job at the tender age of... 34, after a long time in academia and a startup stint that worked out pretty well (startup got acquired by public company) - so now it's the ...
nvergos's user avatar
  • 213
9 votes
4 answers
5k views

Pros and cons of investing in a cheaper vs expensive index funds that track the same index

I would like to invest $1000 in index funds. Both Vanguard and Schwab track the same S&P 500 index. However, Vanguard's S&P ETF has a unit price of $196 and Schwab's S&P mutual fund has a ...
Rohit's user avatar
  • 305
9 votes
5 answers
2k views

Pros/cons of borrowing money using a mortgage loan and investing it in a low-fee index fund?

I'm wondering if this investment strategy would work: I get a mortgage loan for $300K at a 3% rate (realistic for current 5-year fixed mortgage rates here in Canada). I invest the proceeds in a low-...
ramav's user avatar
  • 91
9 votes
3 answers
2k views

Should I transition to index funds now, or wait?

When I started investing, I made the mistake of trying to pick individual stocks and actively managed funds. I now believe that low-cost, passive total market index funds are the best strategy for me ...
Ian Dunn's user avatar
  • 271
9 votes
3 answers
3k views

I am a 23 yr old looking to open a Roth IRA. Should the fund I choose track the S&P?

Not sure what particular funds should be examined, including funds that track the S&P. Is it smart for me at a young age to choose a fund tracking the S&P?
Sam's user avatar
  • 101
9 votes
1 answer
1k views

Why are there contradicting price diagrams for the same ETF?

I'm an absolute beginner to investing. I'm currently looking into the "iShares Core MSCI World UCITS" ETF tracking the MSCI World Index. The iShares Website shows how over the past 5 years ...
Jan Berndt's user avatar
9 votes
1 answer
672 views

How can one relatively easily show that low expense ratio funds outperform high expense ratio funds?

Almost everybody these days says that passively managed, low expense ratio funds outperform actively managed, high expense ratio funds. I believe it, and have been investing accordingly, but I would ...
Craig W's user avatar
  • 15.9k
9 votes
1 answer
1k views

How does ISA allowance cumulate over time?

I don't understand how the ISA allowance cumulate (if it does) over time. Suppose I use the entire allowance for 2014. So I will have in the ISA 15k £. What happens in 2015? Suppose no P&L was ...
opt's user avatar
  • 353
9 votes
2 answers
1k views

Understanding differences between S&P500 index-tracking ETFs [duplicate]

I'm trying to understand the difference between S&P 500 trackers. Example: SPY IVV VOO They all have different prices (IVV being $1 more, on average than SPY, and VOO being about 50% of ...
Dominic Hopton's user avatar
9 votes
1 answer
508 views

Why are index funds called index funds?

Why are index funds called index funds?
ripper234's user avatar
  • 2,400

1
2 3 4 5
10