Warren Buffett Says This Is the Best Way for Average Investors to Grow Their Wealth
Warren Buffett is one of the most successful investors in history, so when he talks, it pays to listen. Thankfully, one investment strategy he consistently recommends is so incredibly easy that even a total newbie can adopt it with ease: Putting money into index funds.
These passively managed funds have the straightforward goal of tracking the performance of existing market indexes. For example, an S&P 500 index fund will aim to match the performance of -- you guessed it -- the S&P 500 itself, usually by holding all the components of the index.
Index funds take a lot of the work out of investing. When you buy individual stocks, you should carefully examine each company's financials and make sure you understand its business model before moving forward (not that every trader does, but they ought to). With an index fund, you can simply look at that fund's performance rather than examine each individual stock it covers. That saves you a ton of legwork.
Source Fool.com
