How to invest in best Index funds in 2020

How to invest in best index funds in 2020

Index fund is a very popular way of investing when it comes to investing in stock market. Many of us don't know how to invest in best index funds. We may confuse about which index fund is better for us or where to invest our money when it comes to index funds. As an investor we are very confused on which is the best time to invest in stock market and which is the best app or site. As a world greatest investor says that

Investing is simple. It's a financial industry that works hard to make it complex.
-Robert Rolih

But here you will find simple and effective way that successful investor use to make money which your stock broker won't tell you. So let's start our blog on, "How to invest in best Index funds in 2020".

Index -

1. Choose where to buy
1. Rating or reputation 
2. Trading cost
3. Variety of funds
4. Customer support
2. Choosing an index 
3. Check minimum investment and expense ratio
1. Minimum investment 
2. Expense ratio
3. Tax deduction

Basics of index funds

Index fund is a basket where all the top companies of that particular country lie. Suppose let's take an example of India, in India there are so many great companies like Reliance, Tata, Infosys and so on so Indian index fund contain the big or giant companies of India that are doing a great business. And if any company is not doing a great business then another great company will take place of it and it will be removed from Index.
So you can say that you are buying the top 100 companies of India.

How to invest in best index funds in 2020

1. Choose where to buy

First and an important step are choosing the best option which suits you to invest in index funds. It could be any particular site or any application that suits you. Here are few steps to choose best option

1. Rating or reputation

Chose an application with best rating and that application should have a great reputation. You are allowing some application to giving your precious money so you have to check the rating and user comment of that application.

2. Trading cost

Check if application is charging you any money for trading most of the application charge al lot of money on trading and on yearly basis. Best application for index or mutual fund investment is free application.

3. Variety of funds

Check your application has numerous amount of funds list or not. If not then it's time to move to the latest application or site.

4. Customer support

Check if your application's customer support services offer you an email based support or a call best support. Phone call based support is great.

If you want an application which follows all these steps then here we have a suggestion for you the best and free application which you need to invest right now Groww app click to link or click on an image and start your first investment - https://groww.app.link/refe/tech1859923

Groww app - India's best free investment app

"The stock market is designed to transfer money from active to the patient." - Warren Buffet

2. Choosing an index

Now you have to choose which mutual fund suits you either you want to buy a fund with more comapanies or you want a fund with top companies. These depend on person to person so you need to see your requirement and chose best index fund which suits you.

India has two indexes Sensex and Nifty 50.
Sensex - Sensex is an index funds which contain top 30 companies of India.
Nifty50 - Nifty50 is an index funds which contain top 50 companies of India.

3. Check funds minimum investment and expense ratio

1. Minimum investment

Minimum investment depends on funds many funds have 500Rs. minimum investment many funds have 1000Rs. minimum investment. So check your budget and companies minimum investment

2. Expense ratio

Expense ratio is cost which fund or fund manager charge you for managing that fund. As index funds replicate indexes so the expense ratio is less as compare to mutual funds. Best expense ratio is less that 0.2%.

3. Tax deduction

Tax deduction impacts your investment in long runs. It is very important to check the tax deduction of your funds so in the long run this deduction won't affect your wealth.

Bonus tip- Invest in index funds for longer duration.

 Follow all these step and chose best mutual fund for yourself. Stay connected we are sooner releasing best mutual funds of 2020. So, this is the blog on, "How to invest in best Index funds in 2020".

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