Index Fund

An index fund simply copies a market index like the S&P 500 instead of trying to outsmart it. No star manager, no big bets — just the whole market at a tiny fee. Here's the kicker: most professional managers fail to beat the index over time, so 'average' turns out to be excellent.

Example: An S&P 500 index fund charging 0.03% keeps $997 of every $1,000 working for you each year; a 1%-fee fund keeps $990.