What is the most successful stock index?
The S&P 500—the Standard & Poor's 500 Index—is considered to be one of the best measures of U.S. stock market performance, tracking 500 of the largest and most stable publicly traded companies in the country.
Market exposure: The most popular index is the S&P 500 index, but index funds track dozens of other indexes. Choose an index that offers the market exposure you want, then focus on funds that track the index.
- DFA US Large Company DFUSX.
- Fidelity 500 Index FXAIX.
- Fidelity Mid Cap Index FSMDX.
- Fidelity Total Market Index FSKAX.
- Fidelity ZERO Large Cap Index FNILX.
- iShares Core S&P 500 ETF IVV.
- iShares Core S&P Total us Stock Market ETF ITOT.
- iShares S&P 500 Index WFSPX.
The S&P 500 and Dow Jones Industrial Average are the top large-cap indexes. Notable mid-cap indexes include the S&P Mid-Cap 400, the Russell Midcap, and the Wilshire US Mid-Cap Index. In small-caps, the Russell 2000 is an index of the 2,000 smallest stocks from the Russell 3000.
| Fund (ticker) | 5-year annual returns | Expense ratio |
|---|---|---|
| Fidelity ZERO Large Cap Index (FNILX) | 14.6% | 0% |
| Vanguard S&P 500 ETF (VOO) | 14.5% | 0.03% |
| SPDR S&P 500 ETF Trust (SPY) | 14.5% | 0.095% |
| iShares Core S&P 500 ETF (IVV) | 14.5% | 0.03% |
In the United States, the three leading stock indexes are the Dow Jones Industrial Average, the S&P 500, and the Nasdaq Composite.
It can be a core portfolio holding for any investor. However, if you're looking to get more exposure to top growth and tech companies, the Vanguard S&P 500 Growth ETF is a great option that has outperformed over the past decade. Geoffrey Seiler has no position in any of the stocks mentioned.
For beginners, the vast array of index funds options can be overwhelming. We recommend Vanguard S&P 500 ETF (VOO) (minimum investment: $1; expense Ratio: 0.03%); Invesco QQQ ETF (QQQ) (minimum investment: NA; expense Ratio: 0.2%); and SPDR Dow Jones Industrial Average ETF Trust (DIA).
Over the long term, index funds have generally outperformed other types of mutual funds. Other benefits of index funds include low fees, tax advantages (they generate less taxable income), and low risk (since they're highly diversified).
| Indices Name | Price | Price Change (% change) |
|---|---|---|
| CAC 40 | 8091.86 | -13.92 (-0.17%) |
| DAX | 18088.70 | -48.95 (-0.27%) |
| Dow Jones | 38460.92 | 0 (0%) |
| FTSE 100 | 8040.38 | 0 (0%) |
Which US index is more important?
"The Dow" actually refers to the Dow Jones Industrial Average (DJIA), an important index that many people follow in order to get an indication of how well the overall stock market is performing.
To choose the best S&P 500 index funds, look for a fund that closely tracks the index's performance and has low investment fees. By these measures, three of the top S&P 500 index funds are the Fidelity 500 Index Fund (NASDAQMUTFUND:FXAIX), the Schwab S&P 500 ETF, and the Vanguard S&P 500 ETF (NYSEARCA:VOO).
Are there dividend-paying index funds? Yes, there are several dividend-paying index funds for investors who prioritize steady income over high growth.
Within the world of corporate governance, there has hardly been a more important recent development than the rise of the 'Big Three' asset managers—Vanguard, State Street Global Advisors, and BlackRock.
Whether the market is down or up, as long as you're investing for the long-term in a well-diversified portfolio it's as good a time as any. If the market is down, it's essentially on sale, and you may be able to pick up an index fund for less money.
- Fidelity 500 Index Fund (FXAIX).
- Vanguard 500 Index Fund Admiral Shares (VFIAX).
- Schwab S&P 500 Index Fund (SWPPX).
- State Street S&P 500 Index Fund Class N (SVSPX).
Most popular indexes: Standard and Poor's 500 (S&P 500) Dow Jones Industrial Average.
The Dow Jones Industrial Average (DJIA) was created in 1896 by Charles Dow and originally consisted of 12 companies, each considered a giant in its sector. The DJIA was first introduced in The Wall Street Journal as the first index of stock market activity.
No actual stocks are bought or sold; index options are always cash-settled, and are typically European-style options.
In 1980, had you invested a mere $1,000 in what went on to become the top-performing stock of S&P 500, then you would be sitting on a cool $1.2 million today.
Is VOO too expensive?
VOO and VTI charge 0.03% annually, while SPY charges a slightly higher 0.09%. This means that for every $10,000 you invest in VOO, for example, you would pay just $3 a year in fees. If that sounds incredibly cheap, it is! The ETF has become one of the most cost-efficient investment vehicles there is.
Fund literature
An investment in the fund could lose money over short or even long periods. You should expect the fund's share price and total return to fluctuate within a wide range, like the fluctuations of the overall stock market.
To be sure, if you have the time, knowledge, and desire to create a portfolio of individual stocks, by all means, go for it. But even if you do own individual stocks, index funds can form a solid base for your portfolio. Index funds offer investors of all skill levels a simple, successful way to invest.
If you're new to investing, you can absolutely start off by buying index funds alone as you learn more about how to choose the right stocks. But as your knowledge grows, you may want to branch out and add different companies to your portfolio that you feel align well with your personal risk tolerance and goals.
The biggest difference between investing in index funds and investing in stocks is risk. Individual stocks tend to be far more volatile than fund-based products, including index funds. This can mean a bigger chance for upside … but it also means considerably greater chance of loss.
