Published on 29 May 2024 on Motley Fool via Yahoo Finance
The S&P 500 index has been hitting new record highs recently. This is great news as mutual funds and exchange-traded funds (ETF) that track the index are widely held by investors. Index ETFs are a great way for beginners and even more experienced investors to gain market exposure. They offer instant diversification, take little research effort, and are generally low cost.
The other great thing about ETFs that track market-cap-weighted indexes like the S&P 500 is that these funds have no emotions. They let their winners run and become a larger part of the index and their losers fall and become a smaller part. This is the exact opposite of what many investors do, which is to take profits in their winning stocks and dollar-cost average into their losers.