Investing in stocks can be a profitable venture if done right. However, narrowing down the best stocks for investment purposes is not always easy. So what kinds of stocks should you invest in? There are a few different kinds of funds that ought to be considered before making a decision.
One type of fund that can be considered is the index fund. Index funds are stock funds that track a certain market index, such as the S&P 500 or Dow Jones Industrial Average. Tracking an index means that the fund's investment will mirror whatever change in value that index experiences, without trying to beat it by investing more strategically. Index funds are best for beginning investors who want to invest in the stock market but do not have the time or know-how to study individual stocks.
Another type of fund that is often recommended to beginning investors are mutual funds. Mutual funds are investments that track multiple different stocks or bonds at once, pooling investor's cash together into a larger investment.