Home     About Us    Contact Us     Contribute     Privacy
Mutual Funds
Related Articles
Related Discussions
Related Definitions
Related Categories
Tip of the Day

Tip of the Day Refinance Your Mortgage if You Can Cut At Least One Point

Refinance Your Mortgage if You Can Cut At Least One Point - Refinancing a mortgage only makes good sense if you are going to save more than 1% on the...

read entire tip

Related Podcasts
Recently Added
Other Great Sites

Index Stocks

Index funds have quickly become one of the most popular investments for a beginning investor in the 1990's. After all, why struggle to try and meet or beat the return of a stock index when you can actually own it?!

Index funds may never take the place of the traditional stock picking involved with a regular mutual fund but they have grabbed their foothold in the market by outperforming 9 out of every 10 mutual funds. And it's no doubt that investing in an index fund over a with a long time horizon in front of you can make you a very wealthy person.

Although these are wonderful investments, some investors are hesitant about investing in these for a couple reasons.

  • These investments aren't really exciting. Because you don't actually pick the stocks in an index fund, you don't have the thrill of picking a winning stock. But no one should just invest in stocks for the thrill of it because then you find yourself buying riskier stocks and that might hurt you down the line.
  • Index funds are mutual funds. Mutual funds are great for most investors but some people just outright dislike them. Sometimes it's because of their expenses (index funds have low expense ratios, though) and sometimes it's because they are a little difficult to sell shares in if you need the money right away. Investors prefer their online broker where they can type a couple keys, make a few clicks, and the order is filled.
  • Index funds also usually carry minimum investments of $2500 and sometimes even more. You can usually get around this buy setting up an IRA or Roth IRA but if you don't do this, it can be hard to meet the minimum investments in some funds.

For those who want more control over their investments with low minimum investments, it would be great if an index stock came along so that the investor could have the ability to buy or sell more shares if needed while also achieving a return equivalent to that of the stock market. For some, this would be a great investment. But wait a second...index stocks are already available!

Index stocks are available to investors right as we speak. They are a lot like index funds only they are traded as stocks on the American Stock Exchange (AMEX). These stocks are also referred to tracking stocks because they track the market very closely and match its return.

These are excellent investments for people who already have a brokerage account and don't want to go through the trouble of setting up another account with a mutual fund company. If this sounds like your predicament, all you would have to do to achieve a return similar to that of the stock market is buy some shares of these stocks.

There are three different tracking stocks right now, all traded on the AMEX. They're traded under the names Diamonds Trust Series 1 (DIA), S&P Dep Receipts (SPY), and S&P Midcap Dep Receipts (MDY).

The difference between these stocks is that Diamonds Trust Series 1 tracks the Dow Jones Industrial Average (the Dow), S&P Dep Receipts track the S&P 500, and S&P Midcap Dep Receipts track the S&P 400. You still have to decide what index you would like to invest in but once you've done that, the stock will continue to track that index.

So if you've been waiting to invest in an index fund maybe these will encourage you to get off the sidelines and get in the game. If you continue to invest in these for the long-term, you can spend your time becoming a very wealthy and financially independent person rather than worrying about beating the stock market. This is because you will actually own shares in the stock market!

Discuss It!
1 2 3 >

Akhil said:

Is there a similar index stock that tracks the TSX? I live in Canada.

share tips said:

Many thanks to you for sharing this information.You explained every point very well. <a href="http://www.optiontips.in" title="share tips">share tips</a>


Interesting stuff, I've learnt a great deal from the stock market just looking at articles from this site.||| said:

I will add this site to your favorites!

http://how-rich.org/net-worth/tag/kevin-schiele-net-worth/ said:

Mind moving things you've generally given to us. On an exceptionally fundamental level continue with made work this kind out of posts.

brz car covers said:

But wait a second...index stocks are already available!

buy cheap dissertation online said:

I must say thank you to you for giving us so much information about index funding here. I am new to the business and I really needed to know about it and thanks to you, I know many things now.

Lean Belly Breakthrough Review said:

Cool you write, the information is very good and interesting, I'll give you a link to my site.

Obsession Phrases said:

It is somewhat fantastic, and yet check out the advice at this treat.

free followers | get instagram likes said:

Presently the web-based social networking locales have turned out to be great stage for the advancement of business and items.

best bride luxury event planners said:

I am a new guy to the investment sector and it was after getting my job I started thinking of investment methods. And I have heard a lot terms after searching about it. Those were confusing terms which lead me to this website which made me help in understanding them.

Rilievi e frazionamenti a Grinzane Cavour said:

I recommend only good and reliable information, so see it:

Callusgo said:

This post is very simple to read and appreciate without leaving any details out. Great work!

encumbrance certificate online said:

I am really enjoying reading your well written articles. It looks like you spend a lot of effort and time on your blog. I have bookmarked it and I am looking forward to reading new articles. Keep up the good work.

ICOS said:

In this case you will begin it is important, it again produces a web site a strong significant internet site:

How to Setup Cisco Router said:

Nice post


Very good topic, similar texts are I do not know if they are as good as your work out.

Download ROS PC said:

You did really good work. I really appreciate your new and different post. Please guys keep it up and share with us some unique post in the future

putlocker said:

Actually I read it yesterday but I had some thoughts about it and today I wanted to read it again because it is very well written.

renta de inflables said:

Amazing, this is great as you want to learn more, I invite to This is my page.

Most Popular Articles
Most Popular Definitions
Related Questions
Daily Definition

Definition of the Day Insider Selling

Insider Selling - Insider selling typically means the running for the hills. It could simply mean company, or corporate executives borrowed too much. Many investors sell more held stock certificates because they are forced to, rather than because these investors want to. The corporate stock certificate investor's insider sales are...

read entire definition




Home     About Us    Contact Us     Contribute     Sitemap


Copyright © 2009 TeenAnalyst.com