Mutual Funds

Index Funds

Why are indexes important to investors, even if we do not invest directly in them?

One of the most important purposes of following a particular index is to provide both large and small investors with a benchmark by which to compare the performance of investments in similar categories. If you own a combination of mutual funds and stocks of large U.S. companies, you may measure your performance against a similar benchmark index such as the Dow to gauge how you are doing each period.


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