RESEARCH PROPOSAL

Research Proposal

Research Proposal

Thesis statement

There are good and bad aspects of both Index and Mutual Funds, however whichever one is better for any particular person depends on his/her situation and willingness to wait certain times, or pay certain fee s. Whether money is be the root cause of evil or not, I don t know.

Research proposal background

What I do know it that since the dawn of man, the concept of currency had been intimately intertwined with human society. It helps form the basis of governments, and most laws.

The world stock market is where these global force that powers our atomic age society merges into a complex matrix of financial void; opportunity in it s most complex form. The raw power of the stock market that can either bring a man to rapid success, or completely ruin him. Two of the prominent worlds of the stock market are the topic for this research paper: Index Funds and regular mutual funds. To my horror, these two terms are incredibly vague words and each have many different parts with their own specific characteristics.

Methodology of Research

I will be comparing and contrasting the over shared characteristics of both kinds of stock market investing. Let us begin by explaining what both these terms actually mean. INDEX FUNDS Indexing, in its simplest form, means buying all of the stocks, bonds or other instrument of a market, or asset class, instead of trying to pick winners and losers. Index investors are content with the average performance of a market. When they invest, they buy all an amount of all the stocks within the index with the knowledge that some individual stocks will gain and some will lose. The hope and assumption is when investing in index funds, that the overall net change of all the stocks in the index average out to a gain. This is usually the case as the normal trend for a market is to gradually climb. Index investors are skeptical that on average a money manager can improve on the average performance without raising risk.

They are even more skeptical after fees are subtracted. The best known index, the Standard & Poor's 500 (S&P 500), is a collection of the top 500 major US stocks. However there are dozens of others, including the Euro Top 100, the largest European stocks; EAFE, a broad global index of companies from numerous countries; and the Lehman Brothers Aggregate Bond Index, a collection of government and commercial bonds. Other names for index investing include "asset class investing" and "passive investing. As the name suggests, passive investing is basically a no brainier.

Research Inferences

The philosophy is not to worry about what individual stocks will gain or lose but to place your risks on the market as a whole. An asset class is simply a category of investment, such as stocks or bonds. THE PROS OF INDEXING No surprises You instantly know whether your gaining or losing as your profits are based on the overall conditions of the ...