Published on 14 Oct 2023 on Kiplinger via Yahoo Finance
How To Master Index Investing
Index investing allows market participants to use baskets of stocks and bonds to build the best portfolio to meet their goals. Here's how it works.
Why struggle to find a needle in a haystack when you can buy the haystack? That was Vanguard founder Jack Bogle's argument for indexing nearly half a century ago when he launched the first index fund for individual investors. The investment approach was easy to execute and offered instant diversification, all for a low fee. And as it turns out, returns have been tough to beat.
Index mutual funds and exchange-traded funds (ETFs) have done better, on average, than most actively managed funds for years. The Vanguard 500 Index Fund (VOO), which mirrors the S&P 500 Index, has outpaced 76% of all active large-company U.S. stock funds over the past 15 years. (Returns and other data are through August 31; funds we recommend are in bold.)