A fuller guide to this term is on the way. In the meantime, the related terms below explain the ideas around it.
Related MoneyPedia terms
- Index FundA fund that owns a broad slice of the market at low cost — the backbone of most investing.
- ETF (Exchange-Traded Fund)A basket of investments that trades like a single stock, letting you own many holdings at once with one purchase.
- DiversificationSpreading your money across many different investments so a drop in any single one does less damage.
- Expense RatioThe yearly fee a fund charges, shown as a percentage of your investment, that covers its operating costs.
- Buy and HoldA strategy of purchasing investments and keeping them for years, riding out short-term ups and downs.
- BenchmarkA standard index used to compare how well your investments or a fund are performing.
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Plain-English education — not personalized legal, tax, or investment advice.