What are ETFs, and Index Funds?
Section 28 Module 6
- Indices are the average performance of the top stocks in the stock market of that country.
- Warren Buffett Recommends Investing In Low-Cost Index Funds / ETFs.
- You can only buy an Exchange Traded Fund that mirrors an index, and ETFs are generally much cheaper and perform much better than than mutual funds.
- The Nifty50 is the average performance of the Top 50 stocks in the Indian Stock market. The S&P 500 is the average performance of the top 500 stocks in the US stock market.
- Index Funds are a safer way of investing in the stock market.
- Index Funds are not capital protected, and you could lose some of your money, if you exit your investment too soon.
Remember - If a company that is on the index today loses its value or goes bankrupt, it will be replaced by the next biggest company automatically.