Is index fund better than mutual fund?


I came to know that index funds are invested on index based companies & gives returns based on the tolerances etc…..
My question
-which one is gud , index fund or mutual fund.
-Is Index fund is good for short term(1-2years) or long
term investment(3-5 years).
-may I know what would be the avargae annual return
for an index fund approximately.

Can any one of you suggest me which one is the best
index fund & how to get it?


4 Replies to “Is index fund better than mutual fund?”

  1. Index funds are mutual funds. they are just not actively managed.

    The choice of which funds depends on how much risk you want to take. There are very few funds that are “good” for short term investment – at that time horizon, it’s just guesswork to hope you’ll get a positive return. Investment money should be (1) money you don’t need for 3-5 years and (2) money you can afford to lose.

    There is no “best” index fund. Vanguard has an index fund for almost any investor, but they require $2500 or more for initial investment. You might be best suited to find someone to help you. It’ll cost you some money but save you thousands in avoiding mistakes.

  2. DffrncMkr is mostly right. However, there are fees associated with any ‘fund’. Check out the Exchange Traded Funds (ETF) since there is no minimum investment and they trade like shares of stock. Right now, I would look seriously at USO (US Oil) and GLD (Gold Trust Shares).

  3. I read about mutual funds from a website. It was easy for me understand. It also had columns for index funds. I hope, it will be useful for you. I have given the link below.

  4. Index funds are mutual fund only & invest only in index companies.

    These are in medium risk , medium return category due to less variation in Index stocks.

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