Decoder · Kinds of investments

Index fund

A fund that copies a published list (an index) instead of paying someone to pick winners. Because copying is cheap to run, these funds usually charge very low yearly costs. They hold everything on the list, so one bad company cannot sink you — and no single star can carry you either.

For your first $100: This is the category most beginner education starts with: your $100 is spread across the whole list on day one, for a yearly cost that is often under a dollar on that $100.

Stock, in plain words Share, in plain words Bond, in plain words

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