Don’t waste your time – keep track of how NFP affects the US dollar!
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Personal areaIndex funds are one of the most favorite traders’ tools as they offer a simple, low-risk, and already diversified way to invest in the stock market. This article will help you to select the best index funds to invest in.
A stock index is a benchmark, which measures the performance of several stocks. For example, the well-known S&P 500 includes the 500 largest companies listed on stock exchanges in the United States. By the way, the S&P 500 index is widely viewed as the top gauge of US stocks. There are plenty of other stock indices.
The market crash after the coronavirus outbreak pushed all the stock indices to record lows, but some of them have already managed not only to return to pre-pandemic levels but also outrun them! For example, the most famous S&P 500 index has exceeded pre-pandemic levels by 23% and it isn’t likely to stop its rally up.
If you’re interested in trading individual stocks, you might find useful our article about best-performing stocks.
A stock index is an already well-diversified portfolio. Diversification is one of the main pillars of trading stocks. It simply means having a range of various assets to minimize the risks of unexpected price movements of one asset. Therefore, indices are more sustained to unexpected market shocks than individual stocks and thus considered as low-risk investments.
For those traders, who have just started, a broad market index is always a good idea as trading just stocks may be too risky. Once you have gained some base knowledge, you can enjoy picking individual stocks too as they generally offer higher yields.
This article was written by and presents the views of our independent financial analysts.
