Indices and cheap investing: what is index investing?
If you choose to invest in indexes, your goal will probably be to achieve the highest possible return and keep the risks as low as possible. You are interested in investing in stocks and bonds , but you do not want to put in too much effort and your knowledge about investing is not optimal or professional. The only thing left is that you make investing as cheap as possible for you and that you make as much profit as possible.
The difference between index investing and fund investing
With index investing you can build up assets. The costs are relatively lower than when you invest in funds. When investing in indexes you follow the development of the market. Funds, on the other hand, try to beat an index through active management. Fund managers are involved in this and there is a limitation in the transactions. An advantage of index funds is that much lower costs are incurred. You pay approximately 0.1%-0.5% per year. With an investment fund the costs are higher, around 0.5% to 2% per year. By investing in index funds you benefit from the importance of the entire index. The spread is much greater and the risks are much lower. You can build up assets over a longer period and you can invest periodically. Selecting shares and a lot of knowledge is not required to invest in this way. This saves you effort and time.
Compare brokers and start index investing
Are you excited about index investing after reading this article? Compare brokers with index investing and find the broker that suits you best!