Beating the market is an extremely difficult task, although many mutual funds (mutual funds) are set to achieve this very goal. These include index funds, which are made up of the shares of the largest companies and as much as possible repeat the structure of the stock exchange index (for example, the MICEX or the RTS). Investing in an efficiently managed index unit investment fund can bring a high return to the shareholder. To get closer to such an opportunity, you will have to solve three main problems: choose the best offer, the time of purchase and sale of shares.
Instructions
Step 1
Choose among those funds that have performed well over several years, not just in the near term. The percentage of companies' shares in the mutual fund's portfolio should be as close as possible to their shares in the structure of the stock index and promptly adjusted following the corresponding exchange changes. Also, pay attention to the size of the commission of the management company of the mutual fund, which is charged from shareholders when buying / selling shares and in other cases.
Step 2
The value of shares of an index fund directly depends on the market situation, which is constantly changing. Therefore, it is worth making purchases periodically (once a month, quarterly) and regularly in order to create the so-called average value of your investments.
Step 3
Index mutual funds are considered one of the most risky areas of investment, because in market downturns, unit holders can incur significant losses. However, in the long term, exchange-traded assets tend to show steady growth. Therefore, when investing in an index fund, you should count on a long investment period (5 or more years) and resist the temptation to sell shares during unfavorable market periods.
