Are you investing your retirement savings in mutual funds? Harold Pollack, co-author of The Index Card: Why Investing Doesn’t Have to be Complicated, makes a case for why you should invest in broad-based index funds. A broad-based fund owns a large collection of securities, as opposed to a small slice of the market. An index fund’s holding aren’t determined by a portfolio manager making a bet on a particular part of the market, but a collection of securities designed to match the performance of the whole market. Broad-based index funds cost very little to buy into, and they don’t have many of the risks that actively managed funds have.
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