Why Index Investors May Be Missing Out on Bigger Gains
Index fund investing is incredibly popular as the most passive way to invest in the stock market -- but if you lean too heavily on this strategy, you might just be selling yourself short. Individual stock investing puts you directly in control of your money. Keep reading to see why you may be leaving money on the table with index investing.
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When an investor buys an index fund, they buy into a basket of stocks that tracks a given index. This immediately creates a portfolio of companies that the investor now holds. If you bought shares of an index fund that tracked the S&P 500, your holding would mimic the changes of that index, both in terms of returns and allocation.
Source Fool.com
