Investing

Definitions

Mutual Fund

• Professional advisers actively managing investments on behalf of others at a fee.

Index Fund

• First launched as Vanguard Group in 1976 by John C. Bogle, who believed that it was more important to stay invested. He created a fund that tracked S&P 500 (aka Vanguard 500 (VFINX)).

Exchange-traded Fund (ETF)

• Same goal as index fund: to provide investors with a benchmark return at minimal cost. Difference is that it costs more to trade index funds while ETF is often traded commission-free.
• Best to use the largest, most widely traded ETFs.