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Index funds provide broad market exposure from "summary" of The Little Book of Common Sense Investing by John C. Bogle
Index funds are designed to mirror the performance of a broad market index, such as the S&P 500. By doing so, they provide investors with exposure to a wide range of companies across various industries and sectors. This broad market exposure helps to reduce the risk of individual stock selection, as the performance of the index fund is tied to the overall market rather than any single company. One of the key benefits of index funds is their simplicity. Instead of trying to pick individual stocks or time the market, investors can simply buy shares of an index fund and hold them for the long term. This hands-off approach is appealing to many investors who do not have the time or expertise to actively manage their investments. Furthermore, index funds offer clarity in terms of performance tracking. Since they are designed to track a specific index, investors can easily compare the fund's performance to the perfo...
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