How to pick the best index fund

Hack Your Wealth

#59: It’s hard to consistently beat the market as an investor…but it takes zero effort to match the market.

Picking good index funds lets you match the market for near-zero cost.

And matching the market produces some pretty good results. If you had invested – and held – $100k (and not a dime more) in a plain vanilla S&P 500 index fund in January 1990, today it would be worth over $1M.

That’s 10x growth in 3 decades, or +7.7% annualized returns.

That’s despite a 1990 recession, 2000-2002 dot com bust, 2008 financial crisis, and 2020 coronavirus.

And all for zero effort.

I dunno about you, but index fund investing sounds richer and a lot more laid back than active stock picking (which almost uniformly results in lower returns anyway).

The key is picking good funds. What’s the best way to do this?

This week, I talk with Jonathan Duong, CFA, founder of Wealth Engineers, a wealth management consultancy, about how to pick the best index funds to invest in.

We discuss:

• Key differences between mutual funds vs. ETFs; between tracking, passive, and active funds
• Step-by-step tips for evaluating an index fund: attributes, criteria, performance indicators
• Recommended online tools to search for and filter indexes and fund options
• How fund expense ratios work
• Specific names (and ticker symbols) of popular index funds for: total stock market, total bond market, government bonds, real estate, all-weather portfolio

Check it out here:

https://hackyourwealth.com/best-index-funds
What are your favorite index funds, and why? Let me know by leaving a comment.

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Resources mentioned in this episode:

• Wealth Engineers
• ETF.com
• Morningstar
• ETFdb
• ETF Replay
• MSCI
• The CRSP Indexes
• US total stock market:
• International stocks:
• Dividend-focused stocks:
• US investment grade bonds:
• US government and municipal bonds:
• International investment grade bonds:
• Real estate:
• Total market / all weather portfolio:
• Schedule a private 1:1 consultation with me
• HYW private Facebook community

Intro/Outro: Old Bossa by Twin Musicom.