Index Funds: How beneficial it is for investing in long-term goals

Index funds are primarily mutual funds that invest in similar stocks within a specific market index. The main advantage of investing in index funds is that they have low management costs because they match their underlying benchmark and don't need a team of research analysts to help fund managers choose the best stocks, said Mahesh Shukla, CEO & Founder, PayMe. The amount that must be invested in index funds of different assets is specified since such funds use an automated and regulation-based investment strategy, which eliminates discretion and doubts in making investment decisions. Amit Gupta, MD, SAG Infotech said that unlike active managers, index funds often have lower cost ratios, allowing investors to put much more their cash where it will accomplish the most good for their portfolio. Siddharth Maurya, Resource Specialist, Expertise Real Estate and Fund Management said to invest in index funds, one must have a long-term outlook that allows them to pursue their long-term financial goals without the hassle of constantly redeeming old funds and clinging to the new.