A friend suggested to invest in a 500 Index fund.?

VOO is the ticker symbol for the Vanguard S&P 500 fund (ETF)

Dividends are 2.01%, internal expenses are 0.05%, probably one of the lowest in the Fund industry.

The index fund is a mutual fund. it is a passively managed fund because the S&P 500 is a passively managed index. Other old traditional mutual funds are always trying to be the Market, which is the S&P 500 index.

Only 11% of the fund managers beat the S&P 500 last year.

So, is it better than a Mutual Fund?

Answer: Only when the S&P 500 is beating all other funds. When the S&P 500 goes down, you will lose money.

A S&P 500 Index Fund such as at Vanguard is a good mutual fund to anchor your portfolio. It uses a passive investment philosophy and because of its low fees, 85 percent of active mutual fund managers lag the performance of such an index fund. In terms of volatility, it is often used as the benchmark with which most US domestic mutual funds are compared. For example, an aggressive mutual fund may be said to have 50 percent greater volatility or risk of the S&P 500 index. A balanced mutual fund may have a volatility of 30 percent less than the index.

Any S&P 500 fund is not extra useful, and no worse, than the favourite and poor's index which it tracks. you acquire zapped because of the fact the inventory marketplace took a surprising downturn, no longer because of the fact there is something incorrect with the fund you're invested in. At your age, the forefront S&P 500 index fund is an strategies-blowing selection for an prolonged term investment. the base line is to hold it "long term". in case you get disenchanted and think of roughly promoting each time it is going down, you're no longer taking the properly suited physique of strategies. the two you're no longer temperamentally suited to inventory marketplace making an investment and might think of roughly putting your money in a extra conservative portfolio, or you are able to desire to forget bearing directly to the fast term united statesand downs and take an prolonged term attitude.