500 Index Fund

[JustJoy]

I was wondering if any of you invest in this and if so which one? I've been doing a little research, but I'm so confused.....lol

[Telephus44]

Which one? There are a lot of index funds that track the same thing.

I invest in the Vanguard 500 Index - it tracks the S&P 500 Index. Basically, it owns the same 500 stocks that make up the index. The stocks that make up the index change depending on what companies meet the criteria (so that poorly performing companies - think Enron - get delisted and new companies are added) and the Vanguard 500 Index just buys or sells the stocks to "match" what stocks are in the index. It is also weighed - so that rather than owning an equal amount of all 500 companies, they own more shares of larger companies than they do of small one.

I like it because it gives me exposure to the stock market, but I'm not picking individual stocks or sectors. So if one area of the market does poorly, it doesn't drag down the entire fund. The Vanguard fund also pays dividends, has a low expense ratio, and personally I'm up 33.5% since I bought it in June 2003. (Although past performance is no guarantee of future returns...)