What is Indexing?

Stock market indexing is a passive investment strategy that aims to replicate the performance of a specific group of stocks or the overall market. It involves creating a portfolio that closely mirrors the composition and weightings of a particular stock market index, such as the S&P 500 or the Dow Jones Industrial Average. By investing in this diversified basket of stocks, investors can achieve broad market exposure and potentially benefit from overall market growth without attempting to pick individual stocks. This strategy is popular due to its simplicity, low costs, and historical long-term returns.