It’s very important to know your personal traits as to risk taking. If you aren’t comfortable, don’t do it. Of course, that means you have to be comfortable with the less than stellar results from a conservative position. Most want what they can’t have, high return with low risk. I see it everyday.

If you believe that you can’t beat the market, you would buy an index. There are basically three major indexes in the US. The Dow, the S&P 500 and the NASDAQ. There are 100 more ETF’s and minor indexes, such as biotech, semiconductor, energy, etc., but those aren’t major indexes and not really what index investing is all about.

If you just buy an index and hold it, the taxes and fee’s are lower, you don’t have to spend any time doing research and staying informed, and you get the same return. If the market is efficient and you can’t beat it, why bother trying? And if you do try, don’t forget to take the cost of your time off your return before comparing it to the averages.