They strive, in a sense, to be merely average. The best-known index is the Dow Jones industrial average, which measures the performance of 30 of the largest U.S. companies. Even if you know nothing else about investing, you've probably seen news briefs relating the daily performance of the Dow Jones. The Wilshire 5000 is perhaps the most comprehensive index of the entire U.S. stock market. Specialized indexes include the Russell 2000, which measures the performance of stocks of small U.S. companies, and the Morgan Stanley Europe Australasia and Far East index, which tells you how major foreign stock markets have done.
Many academics believe investors are best off in index funds.
Because, they say, fund managers can't consistently pick stocks or bonds that will beat their market's index. As a result, most actively managed funds will trail index funds, simply because they charge higher expenses than index funds. Instead of beating your head against the wall trying to choose funds that beat the indexes, these experts argue, you're better off simply investing in index funds. Another approach Our complete title list Tough to beat 2001 The Kiplinger Washington Editors, Inc.