Many investors invest in the stock market, the first thing that comes to mind is to buy stocks. In fact, in addition to buying stocks directly, we can also use some other methods to "indirectly" invest in the stock market, including buying index funds.

The meaning of index fund:

Index is generally the most representative stock portfolio in the market. The so-called index fund is a fund that tracks the rise and fall of the stock market according to certain mathematical methods, and its profit and loss situation is largely consistent with the stock market it tracks. According to the index fitted by index funds, it can be divided into generalized index funds and industry (theme) index funds. Broad-based index funds are index funds mixed with different industries, such as SSE 50 Index, CSI 300 Index and CSI 500 Index. Industry index funds track specific industry indexes.

Advantages of investment index funds:

First, it can spread risks. If you buy stocks, because the investment is too concentrated, once a big risk event occurs, it will inevitably cause great losses, and what's more, it will face the risk of delisting. However, index funds spread risks, and index funds will not easily lose a lot in a short period of time.

Second, index funds avoid the process of stock selection and make investment more convenient and faster. When choosing index funds, you can buy related industry index funds according to the expectation of a certain industry, or you can buy broad-based index funds according to the economic situation. When buying stocks, we should not only pay attention to the economic situation and industry prospects, but also carefully study some financial data of individual stocks and compare them with the same industry. The whole selection process is rather troublesome.