Why I Started Investing in Index Funds and ETFs

During times of uncertainty, stability is key

Dylan Hughes

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It’s hard to get into investing and not go for growth stocks. Understanding the long-term approach of investing takes time. Early on, growing your money as quickly as possible is the default goal.

In my nearly three years of investing, I haven’t gone for any high-volatility stocks (outside of the $50 I put into Tesla, which has given me great returns!). But I haven’t followed the advice of many investors to just stick with index funds.

Many successful investors will tell newbies to invest in funds that reflect the all-encompassing market. In fact, Warren Buffett made a $1 million bet in 2008 that the S&P 500 — which measures the performance of the 500 largest U.S. companies listed on the stock exchange — would outperform any fund portfolio of hand-picked stocks over a 10-year period.

Buffett won the bet with ease, as the S&P 500 gained 125% in value in the 10 years.

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Dylan Hughes

Two-time self-development author writing on whatever interests me. Follow me on Instagram: chyaboidylan