Guidelines On The Best Rated Index Funds To Buy

By Harris Walker
Updated February 9, 2017
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Guidelines On The Best Rated Index Funds To BuyThe year 2016 had ups and downs for investors. Since Donald Trump has been elected president, the market is being significantly affected by both uncertainty and optimism. Naturally, these are short term effects at the moment, and it isn't clear how this presidency will affect markets in the long term. However, regardless of your age, you need to think about what your needs will be in the long term, which is why you may want to find out about the best rated index funds to buy.

Many people find index funds to be the most profitable way to invest in sticks. There are lots of options out there that do not cost a lot, and they are tailored to a range of different needs and abilities. Best of all, they are all suitable for people who do not have the knowledge or time to pick their own individual stocks. But then what are the best rated index funds to buy? Unfortunately, it is impossible to predict that with a 100% degree of accuracy, since markets are always somewhat volatile. Nevertheless, there are some predictions that are likely to be quite accurate.

Some Guidelines On The Best Rated Index Funds To Buy:

What the best index fund for you will depend entirely on your personal needs or capabilities. As such:

Vanguard 500 Index Fund:

- If you are a regular individual with average needs, then you should be looking for approximately 10% rate of return. The best option in this case is the Vanguard 500 Index Fund, which tracks the S&P 500. It has a 0.05% expense ratio, which is really decent. It is an exchanged traded fund (ETF), however, which means you must pay trading commissions.

Two alternatives are the Vanguard 500 Index Fund Investor Class (mutual fund shares, 0.17% expense ratio, $10,000 minimum investment), and the Vanguard 500 Index Fund Admiral Class (0.05% expense rate, but no transaction fee). You need to work out which of these options will keep your personal fees low enough.

- If you are looking for more growth than the 10% expected with the above options, then the Vanguard Small-Cap Growth ETF may be for you, or the Vanguard Small-Cap Growth Index Funds Admiral Shares or the Vanguard Small Capitalization Growth Index Fund Investors Share. These options have always outperformed the market, but the same is true for any decreases they experience. You could, therefore, lose quite a bit of money. The big issue with this option is the volatility of the market, and if you're looking for a short term investment, this risk may be too great.

- If you are looking to preserve your capital and income, then you may want to consider a utility index. The Guggenheim S&P 500 Equal Weight Utilities ETF and the Vanguard Utilities ETF are two very good options that feature gas, electric, and water utilities. The Guggenheim also includes some telecom elements. You will not get a huge appreciation with these funds, but no huge depreciation either. The risk here is that if the interest rates rise, utilities will be affected quite strongly. This is the right investment for those looking at a few years' of investment, rather than decades.





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