Sure, but the person asking this question is asking from a more beginner level that doesn't need to know that unusual edge case.
The answer I'd give is:
Yes, index funds made up of stocks are safer than individual stocks, because it's very unlikely all the investments in a large index will go to zero, or even all go down.
On average, index funds of stocks aren't more modest in gains than stocks--they do just as well as stocks on average.
People think they can pick individual stocks that beat an index, and sometimes they do, but there is good reason to believe that their successes are the product of random chance rather than actual ability. If it is possible at all to pick stocks that beat the market, it is a lot of work. If you're thinking of investing, I'd start with an index.
Depends on the index fund. There are triple leveraged funds that can go to zero in a crash
Sure, but the person asking this question is asking from a more beginner level that doesn't need to know that unusual edge case.
The answer I'd give is:
Yes, index funds made up of stocks are safer than individual stocks, because it's very unlikely all the investments in a large index will go to zero, or even all go down.
On average, index funds of stocks aren't more modest in gains than stocks--they do just as well as stocks on average.
People think they can pick individual stocks that beat an index, and sometimes they do, but there is good reason to believe that their successes are the product of random chance rather than actual ability. If it is possible at all to pick stocks that beat the market, it is a lot of work. If you're thinking of investing, I'd start with an index.
Yes