Welcome to a new week and a new theme here on the One Minute Retirement Tip! 

This week, I’m talking about how to avoid the hidden danger of index funds. Index fund investing continues to grow in popularity, with almost ½ of the assets invested in the U.S. stock market today is owned through indexing. 

If you’re not familiar with index funds, you also might have heard of ETFs, which are basically the same thing. Essentially, index funds or ETFs are a basket of stocks, bonds, or other investments that’s diversified and cheap! 

For example, you can buy several different index funds today that are meant to track the S&P 500 index. So rather than buying all 500 companies in the S&P 500, you can buy an index fund that will in effect, allow you to invest in those 500 companies with just a single investment in that index fund. 

Index funds have been around for so long and are in such high demand, that you can buy an index for a lot of specialized types of investments as well. Perhaps you want to own tech stocks or bank stocks, or gold, or 10-year treasury bonds without actually going out and buying a bunch of treasury bonds - there’s an index fund for all of those and plenty of other asset types as well. 

So today, I just want to lay the groundwork and make sure you understand what an index fund is, before I get into the details about what you need to know as an investor in index funds and how you can avoid some of the hidden and often overlooked dangers that exist with index funds. Hopefully we accomplished that today. 

That’s it for today. Before you go, though, if you haven’t already left a review in Amazon or iTunes for the One Minute Retirement Tip, can I ask a favor of you to go do that right now? It just takes a few seconds and it helps to spread the word, and helps other people find this podcast.

In a recent review The Roy writes: “always seems to hit the mark each week. take 1 minute to listen and find a gem to get you thinking. thanks ashley. I'm glad you are a part of my flash briefing”

Thank you, Roy, and I am honored to be a part of your flash briefing lineup. And thank you to all of you who have taken the time to write a review. 

My name is Ashley Micciche and this is the One Minute Retirement Tip.

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