Index investing is an easy and cost-efficient way to make an investment that will follow the rates of return on the stock market index you decide to invest in.
There are investment products available to invest in funds that follow either the Wilshire 5000 or the S&P 500.
Because of the simplicity of the fund's allocation of funds (they are allocated with the same weight as is given to a stock in the index, to make returns match those of the actual index), and because of the low trading frequency of the shares in the fund, the fees associated with in purchasing into index investments.
There are two types of funds available for investment: index funds (mutual funds that follow the index) and exchange-traded funds (ETFs).
ETFs trade like regular stocks on the American Stock Exchange, which is why you invest in them like you do for stocks.
You could track the indexes on your own, by buying the index' shares in the same proportions as they are represented in the index portfolio.
Buying into funds is the easier way to do this and requires very little from the investor to receive the benefits of index investments.
Index Investing - Resources
Index investments have grown enormously in popularity, partly due to the low fees of investing into such a fund.
They are also easy to understand and to follow their performance. They also provide easy diversification model of stock assets.
Resources to read more about index funds, their performance, and related information, include: