Whats a broad market index?
A broad market index is a group of stocks that you can purchase as one. It allows young investors to buy a collection of top performing stocks that mimic the performance of the entire stock market. Since these index funds allow you to earn returns similar to the overall performance of the market it greatly reduces the risk. This is an advantage to the beginning investor since it is safer than investing in a single stock or some mutual funds; plus there is a history of double digit returns. Although the term ‘broad based index investing’ may sound unfamiliar you already know many of these investments. -The Dow Jones Industrial Average index contains 30 top industrial stocks. -The Standard & Poor’s 500 contains 500 of a variety of different stocks. -The NASDAQ 100 contains 100 stocks that are mostly in the financial and technology sector. When you invest in a broad based market index you actually own a small piece of each individual stock. For instance, when you invest in the S&P 500 bro
