The best index funds are the ones with the lowest expense ratios. An S&P 500 market weighted index fund will always be same no matter where you choose to invest. Therefore, if you're looking for the best place to invest in index funds chose whatever company minimizes costs the most.
The theory why index funds can outperform active investment strategies is that you're minimizing costs and taxes. Therefore, by investing in index funds with high expense ratios you're defeating the purpose of passive investing.
Finding the best index fund families is pretty easy. Time and time again, 3 mutual fund families have provided the best index funds to their customers.
Vanguard - John Bogle, who created the first index found is the founder of Vanguard. Their strategy is simple, lower costs for investors, to provide the highest possible returns. The Vanguard 500 Index fund is the largest index fund in terms of invested money. Their minimum for opening an index fund, is $3,000.
Fidelity - Fidelity is another company that provides their investors with low cost index fund options. They have one of the largest selections of funds available out of any mutual fund company. Their minimum to invest in an index fund are $10,000.
T. Rowe Price - T. Rowe Price is another company that investor's can find low cost index fund. The advantage to investing in T. Rowe Price is their lower minimums. Currently their minimums are only $1,000 to invest in one of their index funds.
The easiest way to invest in these funds is directly with the fund families. That means signing up at their websites, and avoiding all third parties.
Investing with a third party means higher costs. Investing is a game of very small percentages. You need to maximize your chance for success in areas that you're able to. The only direct control you have over your funds is your expenses. All other variables are unpredictable.
Not only to your investments compound, but expenses to do. Even a $100, or a .1% higher expense ratio on an investment of $100,000 is a lost opportunity to invest. If you were to invest $100 for 30 years at a 10% rate of return, you would end up with $18,094 after 30 years! That same scenario with $500, or a .5% higher expense ratio on an investment of $100,000, costs you $90,471 in 30 years!
Index investing has proven to be successful over many years. They allow for great diversification, while keeping costs and taxes at a minimum. The best index funds aren't hard to find, look for the ones with the lowest costs.
RJ Weiss is an aspiring Financial Planner. He currently maintains the website Our Financial Planner, a place where young investors can go to learn the fundamentals of investing and personal finance.
Article Source: http://EzineArticles.com/?expert=RJ_Weiss
The theory why index funds can outperform active investment strategies is that you're minimizing costs and taxes. Therefore, by investing in index funds with high expense ratios you're defeating the purpose of passive investing.
Finding the best index fund families is pretty easy. Time and time again, 3 mutual fund families have provided the best index funds to their customers.
Vanguard - John Bogle, who created the first index found is the founder of Vanguard. Their strategy is simple, lower costs for investors, to provide the highest possible returns. The Vanguard 500 Index fund is the largest index fund in terms of invested money. Their minimum for opening an index fund, is $3,000.
Fidelity - Fidelity is another company that provides their investors with low cost index fund options. They have one of the largest selections of funds available out of any mutual fund company. Their minimum to invest in an index fund are $10,000.
T. Rowe Price - T. Rowe Price is another company that investor's can find low cost index fund. The advantage to investing in T. Rowe Price is their lower minimums. Currently their minimums are only $1,000 to invest in one of their index funds.
The easiest way to invest in these funds is directly with the fund families. That means signing up at their websites, and avoiding all third parties.
Investing with a third party means higher costs. Investing is a game of very small percentages. You need to maximize your chance for success in areas that you're able to. The only direct control you have over your funds is your expenses. All other variables are unpredictable.
Not only to your investments compound, but expenses to do. Even a $100, or a .1% higher expense ratio on an investment of $100,000 is a lost opportunity to invest. If you were to invest $100 for 30 years at a 10% rate of return, you would end up with $18,094 after 30 years! That same scenario with $500, or a .5% higher expense ratio on an investment of $100,000, costs you $90,471 in 30 years!
Index investing has proven to be successful over many years. They allow for great diversification, while keeping costs and taxes at a minimum. The best index funds aren't hard to find, look for the ones with the lowest costs.
RJ Weiss is an aspiring Financial Planner. He currently maintains the website Our Financial Planner, a place where young investors can go to learn the fundamentals of investing and personal finance.
Article Source: http://EzineArticles.com/?expert=RJ_Weiss
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