"Index funds can help investors achieve long-term success through their low costs, broad diversification, low turnover and relative predictability," Comegys says.
"For most, trying to pick winners ex-ante is a loser's game, so the solution is to invest in diversified index funds where you don't have to pick the winners."
"Just as how the stock market returns compound, the deleterious effects of high fees and transaction costs also stack up over time," Johnson says. "In fact, the late founder and chairman of Vanguard, John Bogle, termed this phenomenon 'the tyranny of compounding costs.'"
"Broad diversification is a fundamental component of indexing, and when it comes to U.S. stocks, it doesn't get much more diversified than VTI," Comegys says.
"It is possible to build a simple, diversified portfolio with just two ETFs: a broad-market equity index ETF and a diversified bond index ETF," says Brian Huckstep, chief investment officer at Advyzon Investment Management.
If you prefer to automate contributions and stay hands-off by avoiding trading, a mutual fund may be better than an ETF.
"A consistently increasing dividend can be a signal of a firm's strong balance sheet, disciplined capital allocation and commitment to returning value to shareholders," Comegys says.
Dividends are an important driver of stock returns, but not the only one. Buybacks, where companies repurchase their outstanding shares, have also played a key role.
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