Index Funds vs. Mutual Funds. What's the Difference?
When it comes to investing, there are so many options to choose from you might not know where to begin. You can pick individual stocks, invest in mutual funds, ETF's, or index funds. Well, which one is the right strategy and make you the most money? Unfortunately, there is not one right way of doing things. Some people have made massive amounts of money picking individual stocks, but there are also people who have made a lot of money investing in mutual or index funds. Some people's investing strategy has a combination of investing in both mutual funds and index funds. All of that depends on a few things, your risk tolerance, your age, the returns your expecting, and the fees you're willing to pay.
As I've said on this blog, and I will remain consistent, I believe over the long term that investing in index funds is the best strategy because it takes a lot of the guesswork out of investing. You can create a simple plan and strategy that tracks the market and then adjust periodically while paying low fees.
In this week's post, I wanted to provide a video that goes over what a mutual fund is and what an index fund is and then talks about some of the differences between the two. Investing in index funds is a strategy I think is a good one, however, you have to decide for yourself how you want to invest your money.
I hope you enjoy this video breakdown of mutual funds vs. index funds and take the steps towards building wealth for yourself in the future!