The Best Index Funds You Need To Know About

March 27, 2020

The Best Index Funds You Need To Know About

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Alright, I see you have taken my advice an opened that Roth IRA with an index fund. If not, then why are you here? You better go back and read my previous posts on investing and index funds.

Now for the rest of you. I’m glad you guys have made it this far. Investing is never easy, but I am here to make the path a little easier for you guys.

Let’s jump in. I have assembled the best index funds that I think you guys should invest in. These index funds come from a variety of investment firms but they all track the market. These funds are intended for long term investors that like to buy and hold, not day trade.

Index funds are the mecca of mutual funds because it saves investors billions of dollars in fees over several decades. They are also relatively easy for those who do not want to spend hours reading about individual stocks, researching the markets, etc.

A quick reminder about the most popular indexes:

  • The S&P 500: This is an index performance of the 500 largest U.S public companies.
  • The Dow Jones Industrial Average: This tracks the 30 largest U.S firms.
  • Nasdaq: These tracks more than 3,00 tech companies

Best S&P 500 Index Funds

(The S&P 500 is a stock market index tracks the stocks of 500 large-cap U.S companies)

  1. Fidelity 500 Index Fund (FXAIX)
  2. Vanguard S&P 500 ETF (VOO)
  3. Schwab S&P 500 (SWPPX)

Best Total Stock Market Index Funds

(In case the S&P 500 was not diversified enough)

  1. The Vanguard Total Stock Market Index
  2. Schwab Total Stock Market

Best Aggressive Index Funds

(If you are bold and are going to be holding these funds long- term)

  1. Fidelity Nasdaq composite index (VIGAX)
  2. Vanguard growth index (FNCMX)
  3. Vanguard mid-cap index (VIMAX)

Best Bond Index Funds (to balance out you daredevils)

Best of Bond

(To balance out you daredevils)

  1. Vanguard Total Bond Market (VCTLX)
  2. Fidelity Total Bond (FTBFX)

Summary

A combination of any of these index funds held long term should have you guys ready for retirement or any large purchases you want to make in the future. Remember that this type of investment vehicle is not meant for short term profit. Instead, it is meant to be held more a long time (a minimum of 10 years) in order to really benefit from it.

There are those that argue that the push towards index funds is driving the value of the market higher and higher which is going to lead to a valuation bubble.

So, there is certainly a worry that when and if the bubble pops, these funds (which are supposed to be safe) could end up hurting this particular segment of the market the most.

If a financial bubble was to occur and prices crash it would not make that much of a difference to those that are buying and holding for more than 20+, 30+ years. However, those looking for short term gain will definitely feel the pain. If this happened, and that’s a big if.

To calculate what this funds might look like in a number of years click here



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