In the quarter century they’ve been around, index funds have made investment easy, efficient, and cost-effective. They are mutual funds or exchange-traded funds (ETFs) that hold investments, typically stocks or bonds, tied to an index—hence the name—such as the Dow Jones Industrial Average (DJIA) or S&P 500. Index funds offer a number of advantages: diversification, low costs, and little-to-no maintenance on the part of the investor.
This post originally appeared at TIME.