Personal Finance

Spend less than you earn, invest the rest

Novice

Mastery0%

Novice

Note. Education, not financial advice. Tax rules, regulations and product specifics change, for real money decisions, talk to a SEBI-registered advisor whose incentives don't depend on selling you a product.

Concept 05 of 19

settled

Index funds beat picking

Over long horizons, a cheap fund that tracks the whole market beats most clever ones.

Definition

An investment approach where a passive low cost fund replicates a market index (such as the Nifty 50) rather than trying to pick winning stocks, on the basis that after fees most active managers lose to the index over long horizons.

Step 1

Predict first

In one or two sentences, what do you think this concept means? Wrong is fine; the small struggle is what makes the answer stick.