Low-Cost Index Funds – Affordable Equity Holdings that Mitigate Risk

Low-Cost Index Funds pic

Low-Cost Index Funds
Image: beginnersinvest.about.com

A longtime financial professional, Tony Ehinger guided an international multibillion-dollar sales and trading desk with Credit Suisse. Tony Ehinger has extensive experience in properly diversified portfolios and has particular knowledge of low-cost index funds. These holdings offer fundamental security that trying to “beat the market” simply cannot. In addition to being priced affordably, they are broadly diversified, which removes the risk associated with holding individual stocks.

Warren Buffett is one of the biggest proponents of low-cost index funds, and in 2014 he gave specific advice to Berkshire Hathaway shareholders: place 10 percent of investment money in short-term government bonds. The other 90 percent, according to Buffett should be allocated for a “very low-cost” fund tied to the S&P 500 index.

Finding a truly low cost fund is not as easy at it might seem, however. Factors such as expense ration, brokerage commissions, and front-end loads can pile on costs associated with holding index funds. For this reason, it makes sense to partner with a respected financial professional in finding the right fund suited to one’s individual needs.

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