đAll global financial crises began with the Wellington Fund (a prototype of the Vanguard Fund) which came up with the concept of index investing and mutual funds. Index investing is investing in stock indices. According to the concept of index investing, to earn money, you must buy a portfolio of securities that make up a set of an index basket, and this entire basket will bring the investor a return equivalent to the growth of the index. What is an index - it is an aggregator, in other words, a cumulative growth index (for example, stock prices of all S&P500 companies). To put it simply, buy securities of companies that form the index in the same proportion, and sleep well, because it always grows, that is, you will always earn money because the index is considered as an increase in the price of securities of companies included in the index. If the index, which is a derivative of the price, is growing, then the price of securities is also growing. If you hold securities of S&P500 companies, then in aggregate the entire basket will bring income equal to the growth of the index. Index investing is designed for a person who is not knowledgeable in economics and finance. Because in describing index investing, John Bogle gave us the concept of an ideal market that does not exist in real life. Index investing works only in conditions of perfect competition (the so-called perfect market).
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