for most, An s&P 500 fund will do; seek index funds with low fees [Virginian – Pilot]

Question: I'm a beginning investor and have heard that when it comes to mutual funds, I shouldn't bother with anything but a low- cost index fund. Is that right?

- V.E., Salisbury, Md.

A: For most people, a broad-market index fund is perfect. An S&P 500 fund will have you invested in 500 of America's biggest companies. (Many of them have substantial overseas operations, too, giving you valuable international exposure.) You can go even broader with something like Vanguard's Total Stock Market Index, which also includes smaller and medium-size companies.

Seek index funds with low fees, such as ones from Vanguard, Fidelity, Schwab and others. They often charge less than 0.25 percent annually.

If you want to try to beat the market, you might put some of your money into a few top-notch managed mutual funds, or invest in a few carefully chosen individual stocks. Index funds, though, are the easiest and can get you close to the market's return, which is great for those without the time or expertise to study funds and stocks.

Fool's school

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Foolish trivia

I trace my roots back to a Lakewood, N.J., hotel business in 1946, which was followed by a controlling interest in a chain of 102 movie theaters. Today, based in Manhattan, I'm an insurance giant with other businesses, raking in more than $14 billion annually and sporting a single-letter ticker symbol on the stock exchange. I have five principal subsidiaries: CNA Financial Corp., Diamond Offshore Drilling, HighMount Exploration and Production, Boardwalk Pipeline Partners, and a hotel-and-resort business that bears my name. Focusing on value investing, I have trounced the S&P 500's returns over the past 50 years. Who am I?

Answer to last week's question: AFC Enterprises

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