Jumpline magazine February 2025 - Flipbook - Page 9
Financial Alternatives
Mark Buckley, MDFR Ret.
diversify your risk by choosing different index funds that target
various sectors and asset classes. For example, you might consider:
U.S. Equity Index Funds: These track major indices like the
S&P 500 or the Total Market Index.
International Equity Index Funds: These give you exposure
to global markets outside of the U.S.
Small Cap Index Funds: Small-cap stocks are those from companies with a relatively small market capitalization, which is the
total value of the company’s outstanding shares. These tend
to have a little more volatility but offer higher growth potential.
Mid Cap Index Funds: Stocks of companies with a market capitalization in the middle range of listed stocks. They
tend to offer investors more growth potential than large cap
stocks, but with less volatility and risk than small cap stocks.
Large Cap Index Funds: This type of investment fund tracks
a market index composed primarily of stocks from large
companies, meaning companies with a high market capitalization (total value of outstanding shares), typically representing the top 70% of the equity market by market cap.
Bond Index Funds: These funds track various bond indices and can provide stability and income to your portfolio.
Expense Ratio: When choosing an index fund, make
9
sure to review the expense ratio, which is the annual fee charged by the fund. As a rule of thumb, look for
funds with low expense ratios (typically under 0.2%).
Fund Size and Liquidity: Larger, well-established funds tend
to have more liquidity and better pricing, making it easier to buy
and sell shares without incurring additional costs.
5. CONCLUSION: SET YOURSELF UP FOR SUCCESS WITH INDEX FUNDS
Investing in index funds within your 457 plan can be a powerful
strategy for achieving long-term growth while minimizing fees.
By focusing on broad market exposure and keeping costs low,
you’re setting yourself up to bene昀椀t from the power of compounding returns. The combination of diversi昀椀cation, lower fees, and
tax advantages offered by your 457 plan makes index funds one
of the best options for building a solid, growing retirement fund.
As you consider your investment options, remember success
in retirement saving is about consistency, patience, and making
smart choices. Index funds allow you to achieve those goals
ef昀椀ciently, ensuring that your hard-earned money works for you
now and in the future.
Please stay safe!
Mark Buckley ret. MDFR
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March 2025 | JUMPLINE Magazine
