📊 Index Fund Investing
The simplest, most consistent path to long-term market returns. Understand why index funds beat most professionals over time.
What Is an Index Fund?
An index fund tracks a market index — like the S&P 500 or the total US stock market — by holding the same securities in the same proportions as the index. When the index goes up, your fund goes up. No stock picking. No manager guessing. Just the market.
Why Most Active Managers Lose to the Index
Study after study shows that over 80-90% of actively managed funds underperform their benchmark index over 10+ years. High fees, trading costs, and the difficulty of consistently picking winners all work against active management. The index doesn't try to be clever — and that's its edge.
Dollar Cost Averaging (DCA)
Instead of trying to time the market, dollar cost averaging means investing a fixed amount on a regular schedule — weekly, bi-weekly, or monthly. When prices are high, you buy fewer shares. When prices are low, you buy more. Over time, DCA smooths out volatility and removes emotion from investing.
Which Index Fund Should You Start With?
For most investors, a total market index fund (like VTI or FSKAX) or an S&P 500 fund (like VOO or FXAIX) is the right starting point. Look for the lowest expense ratio, no minimums, and tax efficiency. Add international exposure with something like VXUS for diversification beyond US markets.