Re:Half of US stock fund assets are now invested in index funds
by snowwrestler on Monday May 27, 2019 @09:45PM
(#20026551)
It's not bad news.
There are index funds that track the S&P 500. But who would decide what a "dumb" stock is? I don't even know where to start with this concept. I would not worry about this if you are an investing noob.
You should not avoid an American-only index fund. The U.S. equity market is by far the largest in the world, so a broad index of American stocks will cover a lot of diversity. That said, there are plenty of international stock funds available as well.
I would at least look at CDs (certificates of deposit) or short term bonds, which will give you better returns than sitting in a bank account. Stocks will have a better chance for an even better return... but also a chance that the market will be down when you want to get that apartment. That's a fundamental concept for investing: higher returns come with higher risk (and vice versa).
There are index funds that track the S&P 500. But who would decide what a "dumb" stock is? I don't even know where to start with this concept. I would not worry about this if you are an investing noob.
You should not avoid an American-only index fund. The U.S. equity market is by far the largest in the world, so a broad index of American stocks will cover a lot of diversity. That said, there are plenty of international stock funds available as well.
I would at least look at CDs (certificates of deposit) or short term bonds, which will give you better returns than sitting in a bank account. Stocks will have a better chance for an even better return... but also a chance that the market will be down when you want to get that apartment. That's a fundamental concept for investing: higher returns come with higher risk (and vice versa).