Index Investing For Dummies

A recommended, proven way to broaden portfolios and profits Recommended by finance experts and used extensively by institutional investors, index funds and exchange-traded funds (ETFs) provide unmanaged, diversified exposure to a variety of asset classes. Index Investing For Dummies shows active investors how to add index investments to their portfolios and make the most of their money, while protecting their assets. It features plain-English information on the different types of index funds and their advantage over other funds, getting started in index investing, using index funds for asset allocation, understanding returns and risk, diversifying among fund holdings, and applying winning strategies for maximum profit.

Introduction 1 Part I: The (Mostly) Nonviolent Indexing Revolution 7 Chapter 1: What Indexing Is and Isn’t 9 Chapter 2: A Short History of the Index and Index Investing 19 Chapter 3: Why Indexing Works — and Works So Darned Well 33 Chapter 4: Why Everyone Isn’t Indexing 45 Chapter 5: A New Era Begins: ETFs and Alternative Indexes 59 Part II: Getting to Know Your Index Fund Choices 73 Chapter 6: The Basic Index Investing Components 75 Chapter 7: Investing in Stock Indexes: Your Gateway to Growth 95 Chapter 8: Investing in Bond Indexes: Protecting Your Principal 133 Chapter 9: Diversifying Your Portfolio with Commodity, REIT, and Other Indexes 151 Part III: Drawing a Blueprint for Your Index Portfolio 171 Chapter 10: Finding a Happy Home for Your Money 173 Chapter 11: Developing Your Broad Investment Goals 185 Chapter 12: Fine-Tuning Your Index Selections 197 Chapter 13: Mixing and Matching Passive and Active Investing 209 Chapter 14: Making Your Final Investment Decisions 225 Chapter 15: A Bevy of Sample Index Portfolios 233 Part IV: Ensuring Happy Returns 245 Chapter 16: Buying and Holding: Boring, But It Really Works 247 Chapter 17: Seeking Additional Assistance from Professionals Carefully 259 Part V: The Part of Tens 269 Chapter 18: Ten Ways to Deal with the Temptation to Beat the Market 271 Chapter 19: Ten Ways to Screw Up a Perfectly Good Index Portfolio 277 Chapter 20: Ten Q & As with John Bogle, Father of Index Investing 281 Part VI: Appendixes 287 Appendix A: A Select List of Index Mutual Funds 289 Appendix B: A Select List of Exchange-Traded Funds 297 Appendix C: Helpful Web Resources for the Smart Index Investor 315 Index 321