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by rightbyte 2766 days ago
A index fund doesn't follow the index. There is a broker fee, stock transaction fees for the broker to keep the fund balanced and stock falling out of the index (because of the company eg. halfway to bankruptcy) is a loss for the fund but in the index the next biggest stock just takes it's place.

To keep up with the index is probably really hard.
2 comments
RussianCow 2766 days ago
The iShares S&P 500 ETF (quote: IVV) has an expense ratio of 0.04%, is offered commission-free on many brokerages, and based on some quick calculations, follows the official index to within about 0.5% returns. You're right that it's not completely "free", but the total "cost" is only about half a percentage point, meaning you can pretty closely follow the index in the long run with a single ETF purchase. I don't know what could be easier. :)
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clairity 2766 days ago
it's not that hard (and there is no "the index", just various approximations of a market portfolio). vanguard is well known for low-fee, no-frills index investing (among other things). invest in one of their funds and you'll likely net over 5% over the long run.
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