All About Index Funds clearly explains why investing in index mutual funds is the only reliable winning strategy. Ferri compares and contrasts active mutual funds with index funds in a way that even a novice will have no trouble navigating. Once you read this book, you will no longer listen to the hype from Wall Street stockbrokers and their analysts who are paid to make money from you, not for you.
All About Index Funds is divided into three parts. All three sections are written to help investors at all levels of experience. The sections can be read independent of each other or from one to the next. Part I explains what a market index is and how index mutual funds work. There is a short history of the index fund industry, including a chapter devoted to new exchange-traded funds. Part I also highlights the performance advantages that index funds have over other types of investments.
Part II categorizes the broad spectrum of index funds based on type and style. Many people are aware of the big index funds, such as S&P 500 index funds, but don’t know that there are hundreds of index funds covering a variety of markets. There are funds tracking the bond market, international stock, industry sector markets, bond markets, commodities market, and currency market. New funds are formed every month, and as the number of funds continues to grow, the cost of investing in those funds continues to fall.
Part III of the book is all about using index funds in your portfolio. To help with this decision, there are chapters on forecasting market returns, asset allocation, risk control, and retirement planning. Several model portfolios are introduced.
All About Index Funds is a guidebook for new index investors and a reference for more experienced investors. The book was written to provide more than enough information to build and manage a quality index fund portfolio. There are a few words of caution before we proceed. Converting to an index fund portfolio does not guarantee positive returns every year. No viable investment strategy can do that. You must be patient. In the long-term, a well-diversified index fund portfolio will make you more money with less risk than any other popular investment method. This is a guarantee. Index funds cost far less than other types of mutual funds, so eventually the laws of economics will take over and index funds will deliver higher returns.
There is one other important point to remember. For any indexing strategy to be truly effective, you must build the right mix of index funds for your needs and wait patiently for the markets to do their magic. If you stick with a well-managed strategy for several years, the fruits of the marketplace will come to you. It is in the long run that index funds truly shine. All About Index Funds is all about a simple and effective lifelong investment strategy that just plain works.
- Index Funds Explained
- Why Index Funds Beat Most Other Funds
- The History Behind Indexing
- Exchange-Traded Funds
- Tax Advantages of Index Funds and Exchange-Traded Funds
- Broad U.S. Equity Market Funds
- U.S. Sector Equity Funds
- Global and International Equity Funds
- Alternative U.S Equity Funds
- Investing in Bond Index Funds
- Commodity and Currency Funds
- Forecasting Index Fund Returns
- Asset Allocation Basics
- Defining Your Financial Goals
- Designing Your Index Fund Portfolio
- Managing an Index Fund Account
All About Index Funds: The Easy Way To Get Started By Richard A. Ferri pdf