Index funds are based on a simple concept: when the index goes up, index funds benchmarked to that index should go up nearly an identical amount and vice versa. Index Investing For Dummies shows readers how they can make use of index funds to take advantage of these large markets and maximize the return on their investments.

Broaden your portfolio and your profits with this plain-English guide

Interested in index funds? Want to invest your money wisely? This plain-English guide explains a recommended, proven way to use index investments to build a well-diversified,low-cost portfolio. Whether you're a conservative or aggressive investor, you'll see how to find the right funds that provide healthy long-term returns — and stay afloat in tough economic times.

• What are index funds, anyway? — learn how index mutual funds and exchange-traded funds work and their advantages over other funds

• Evaluate your index fund choices — from stocks and bonds to commodities and real estate, understand the risks and rewards

• Make the right investing moves — discover your investing style, your connection to the market, and your long-term financial needs

• Develop your portfolio blueprint — decide how many funds you need, where to house them, and whether to mix index funds with other investments

• Manage your money wisely — disaster-proof your portfolio, correct your mistakes, and get help from the pros if you need it (but tread carefully!)

• Ensure happy returns — see how to maintain a smooth-running, age-appropriate, profitable portfolio for years to come

Open the book and find:

• Clear explanations of index funds — and why they work

• How to avoid the temptation to beat the markets

• Evaluations of popular index funds — the best and the worst

• Sample portfolios, from conservative to aggressive

• Lists of index mutual funds and ETFs

• Web resources that help you stay up-to-date

• A Q&A with John Bogle, founder of Vanguard

A recommended, proven way to broaden portfolios and profits

Recommended by finance experts and used extensively by institutional investors, index funds and exchange-traded funds (ETFs) provide unmanaged, diversified exposure to a variety of asset classes. Index Investing For Dummies shows active investors how to add index investments to their portfolios and make the most of their money, while protecting their assets. It features plain-English information on the different types of index funds and their advantage over other funds, getting started in index investing, using index funds for asset allocation, understanding returns and risk, diversifying among fund holdings, and applying winning strategies for maximum profit.