INDEX INVESTING BASICS

Hye everyone

Hope you all are doing great.

So today i will be discussing with you about index investing basics .

So what is Index fund??

Index fund - 

It is a mutual fund or exchange traded fund designed to follow certain rules that are preset so that the fund can track a specified basket of underlying investments.

This make include tracking indexes that are prominent like the S&P 500 .

In the simplest sense we can say that index funds is an investment fund that attempts to do the same performance of a given index of stocks or some other investment type .

This can include both the bonds of even a narrow subset of financial market .

Since an index fund owns all of the investment of index so there is no concept of winner or loser here.

And thereby the maintenance is also not that much required for these funds .

They are also ordinarily cheap .

Index funds is a way through which investors can get back into the stock market .

It is simply a mutual fund where instead of portfolio manager who makes selections ,the capital allocation is delegated to whoever determines the index methedology.

Why to invest in Index ??

The investment decision is a mutual fund solely depends upon the risk preferences and Investment goals .

Index funds are ideals for investors who are risk -averse and expect predictable returns .

These funds do not require extensive tracking .

The returns of Index funds may match the returns of that of actively managed funds that tends to perform better in the long term .

Things to consider as an investor -

1. You should be able to tolerate risk

2.Return are not always as expected to beat benchmark but just to replicate the performance of the index.

3.Less cost of investment is there in index.

How to invest in index funds ?

A.Sign to cleartax.in

B.Enter the details

C.Get your electronic  kyc 

D. Invest in the index you want.

So these are the basics about index investing .

Hope you find this article helpful

Thanks