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Index Funds

An index fund is a portfolio of tens, sometimes hundreds of stocks that has been assembled by a company. The good thing about index funds is that the portfolio is available for the public to see. However, there are hundreds of index funds so it is important to research through all of them in order to find one that has enough stocks that you like.

Due to the extreme diversification of an index fund's portfolio, there aren't major jumps or slumps in stock price. However, this large amount of diversification allows for an index fund to be on the safer side of investments. An index fund might not be the best investment if you are trying to grow your portfolio quickly but, it is a great alternative to a savings account that you can let your money set in.