Everyone is always telling you to simplify this, simplify that. Your closet. Your workout routine. Your financial life.
Great advice, but how do you actually do that?
One thing to do is cut through the noise. And few things are more blaringly confusing than looking at a line-up of investments when you open an individual retirement account (IRA) or sign on to your company's 401(k) plan.
So many funds, so many names, so many decisions. You probably already know more than you think you do.
Take mutual funds. This is a collection of securities: usually stocks, sometimes bonds. They're professionally managed by a portfolio manager, so they come with fees. You probably also know what an index fund is: a variation of a mutual fund that holds a basket of stocks that tries to mirror or track the performance of an index. The best-known indexes are the S&P 500 and the Dow Jones Industrial Average.