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Fortune
Fortune
Coryanne Hicks

Why is everyone talking about index funds? Probably because they're awesome.

Photo illustration of a circle of $1 bills standing on their edges with a section of 6 bills on the right side pulled out from the circle to resemble a pie chart. (Credit: Photo illustration by Fortune; Original photo by Getty Images)

Investing in an index fund is like taking the train when you travel. Other methods might get you to your destination faster but might cost more or require more effort. With a train, you only need to know when you want to get on and off. The rest is taken care of by the conductor.

Index funds offer a similar experience for investors. They're low-cost and hands-off, and once you invest, you can let the fund manager (or index) do the rest.

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