Index funds are baskets of many companies designed to match a market index. Instead of picking individual stocks, you buy the whole market at once, which lowers risk and costs.
Why beginners like them • Instant diversification across many companies • Very low fees compared with active funds • Historically competitive returns with minimal effort
How to use them Define your goal (retirement, long-term wealth). Pick a broad-market index fund. Automate monthly contributions. Ignore day-to-day news and focus on time in the market, not timing the market.
Risk reminders Market values go up and down. Use money you won’t need for at least 5–10 years. Pair investing with a solid emergency fund.