What are good index funds to consider?
Answers:
You can get some ideas from "Money" Magazine. Your library should have it. Be aware that performance data is always retrospective (tells you how it performed over the past year or 5 years, or 10, etc.) It should not be relied on to predict future performance.
As you choose a fund to invest in, pay attention to fund expenses and aim for a fund with low expenses. This information is frequently given in discussions of mutual funds. Also pay attention to the amount of risk vs. potential return and tailor your choice to match your tolerance for risking that the value of your investment might decrease. Also, as you choose, analyze whether you're going to need this money in 2 years, or 10 years and choose a fund accordingly.
Vanguard has generally lower expenses.
With that little bit of money to invest I would look another way. You want diversification and an idex fund won't give it to you. It will diversifiy you across one market segment, but not across different asset classes. For small investors just starting out I like something like the Ivy Asset Strategy fund. I own it as a core to my portfolio. The advantage to it is that it allows the managers to invest in any asset class in any percentage they feel appropriate. They can invest in US Stocks (any size), International, Commodities, even foreign currency if they chose. This is a great way to get better diversification out of owning just one fund. If you buy and S&P 500 Index fund and the S&P doesn't perform well then you don't perform well, but if you own a fund like this one they may own bonds or international that can offset the poor performance of anything they own that might be included in the S&P. Yes the expense ratios are higher for this type of fund, but if you compare it to most indexes you will see favorable returns and less risk.
Money Magazine rates the top stocks and mutual funds. Check it out.
http://money.cnn.com/magazines/moneymag/...
http://money.cnn.com/data/commentary/siv...
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