There are many funds that are based on the value and appreciation of an index in the market. Examples of what these stock mutual funds focus in on could be the S&P 100, S&P 500, NASDAQ or other broad based groups.
Broad based funds perform with the market a s a whole. Index funds could also be based on a narrow based side of the market. A narrow based index concentrates on a specific sector of the market, either in industry or geographical location.
These areas could include only Telecommunications, South American Companies, Asian Energy groups of stock, etc.
These index investments tend to move with the market, as the money is invested farily equally into the stock market of whichever group or objective makes up that fund strategy.
Index Fund Trading can be one of the more profitable strategies or the most expensive strategies an investor can do.
While trading a group of Stocks has it's advantages, including taking away the risk of any one Stock in going down hard and taking all of your capital and profit with it, Indexes are usually highly erradic, particularly smaller ones.
Using technical analysis and swing trading methods for your index fund investing can largely improve your trading results and profits if you are skilled at looking at Stock trends and stock patterns.
The S&P 500 is one of the best known indexes in the global market, and it has an extended history of documented trends that have made and lost traders large profits throughout history.
By trading and investing in a managed fund that tracks the Index, investors can participate in the changes of the market.
There are many funds that trade opposite to a large index. One of these can be used to trade the downside when prices are falling, as they did for a long period of time as the market came off a high.
The problem with index funds is that there is limited leverage. This is why many traders switch to Index Fund Trading via derivatives as opposed to buying a standard Mutual fund.
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