i want to buy an index fund, how do i do that?
I'm a 15 year old so i know that i need a custodial account...
which brokerage do you recommend? which index fund? i have about 600 dollars to invest...
- Anonymous1 decade agoFavorite Answer
The first thing you need is a broker that will let you open an account with only $600.
This broker will allow you to open an account with only $500 and their commissions are very cheap. They also have a decent reputation.
You will have to purchase an exchange traded index fund rather than one provided by a mutual fund company, because the mutual fund companies have much higher minimum investments.
Here is a site that will provide you with all of the data on all ETF index funds and also all ETF closed end funds. It is an excellent source to evaluate which ones you wish to invest in.
I am somewhat hesitant to recommend one to you. It would just be a shot in the dark. I could but I prefer that you do your own research at the site and make your own decision. Look at the investment strategy of each fund and their overall track record for the past 5 years. Look at the pool of investments that they invest in.
One note of caution. Most index funds are market capitalization weighted. For some that means that the top 10 holdings of the fund make up as much as half the fund investments. That is a drawback of index funds in general. They do not provide you with proper diversification. Some are much worse than others however.
Just for the fun of it, compare the closed end funds to the index funds to see if any of those might suit your fancy. Note: Many of the closed end funds sell at a discount to net assets. It is like buying stocks on sale.
- gregory_dittmanLv 71 decade ago
Index funds are also known as ETFs and you can see a list of them in Yahoo's stock market section. SPY (the ticker tracking the SP500) is the general benchmark that most mutual funds can't beat over time.
Since it's a low amount, try sharebuilders. You will pay $4 to buy $596 worth of whatever and there is no annual fees unless it's an IRA account.
- swenjjLv 41 decade ago
if you just want to invest in mutual funds i wouldnt use a broker, i would go to a no load fund family, troweprice,fidelity, or vanguard, vanguard specializes in index funds, very cheap
not sure on the minimum with vanguard though
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- Anonymous1 decade ago
1) TD Ameritrade. (You will need more money)
2) S&P 500, DJIA and the NASDAQ-100 are good choices.
- CaseyLv 44 years ago
by using iShares