Tuesday, September 18, 2012

Is it true that regular investment index makes good results with low risk?

There are many mutual funds and ETF on the market. But only a few performs results as good as the S & P 500 or better. Known that the S & P 500 performs good results in terms of length. But how can we transfer this money to good results? Can buy ETF.
Investment in the ETF gives an opportunity to be a result of this investment will be close to the result of the index.

As we can see, and we receive a good result does not do anything. This is the most important benefits of investing in the ETF.

This strategy works best investment over the long term. This means that you should invest your money in the ETF for a period of 5 years or more. Most people do not have a lot of money to invest a great time. But can invest a small amount of dollars every month.

Test result shows that every month investing small amounts of dollar gives good results. Statistics show that will benefit from 26% to 28.50% of the initial investment in the S & P 500 with 80% probability.

Note that investing in index is not without risk investment. There results with the loss in our tests.

Diversification is the best way to reduce risk. Can invest in 2-3 different indexes reduces the risk significantly. Are given the best results by investing in the index for different types of assets (bond index and stock index) or different asset classes (small caps and large caps and mid).

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