4min chapter

Marriage Kids and Money: Personal Finance for Families cover image

Paula Pant + Jeremy Schneider: Why Index Funds Will Make You a Millionaire (BEST OF MKM)

Marriage Kids and Money: Personal Finance for Families

CHAPTER

Why Diversification Is Important in Index Fund Investing

The expense ratio on index funds is significantly cheaper than the expense ratios that you'll see on an actively managed mutual fund. By having a mix of these different types of assets, you get some things that zig when others egg. You not only get the diversification by being in the index fund itself, because you're owning 500 or thousands of companies, but if you look at diversification amongst the classes themselves, so maybe small cap international bonds,. making things a litle bit more comfortable.

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