Mutual Funds

Index Funds

What are some disadvantages to investing in an index fund?

Experts at Forbes note many reasons to invest in index funds. However, there can also be some disadvantages to investing in index funds. Some index funds have relatively high management fees. Other index funds purchased through a broker may require commission payments and fees when you first buy shares, acquire more shares, and sell shares. It is also important to note that buying index funds is not intended to replace proper financial planning, asset allocation, and risk awareness. It is important to have a clear understanding of how you wish to have your portfolio properly allocated before you invest in any instrument, including an index fund.


This is a web preview of the "The Handy Investing Answer Book" app. Many features only work on your mobile device. If you like what you see, we hope you will consider buying. Get the App