How reliable are the returns on the stock index mutual funds?
On One Hand: Index Funds Match The Stock MarketIndex funds are mutual funds that try to replicate fluctuations in whatever stock index they’re tied to. For example, the value of a Dow Jones index fund (DIA) will increase as long as the Dow Jones Industrial Average increases.On the Other: Index Funds Tend to Follow the Overall EconomyIn a period of great economic growth, you can expect a steady increase in the value of your index fund. However, during a recession, the market trends downward, and you can expect the opposite-a steady decrease in value.Bottom LineWhile index funds are a safe bet during times of economic growth, their returns diminish in times of recession.
