Indexing is an investment strategy to match the average performance of a market or group of stocks.
Usually this is accomplished by buying a small amount of each stock in a market. Numerous independent studies have shown that indexing provides greater returns over time with less risk and lower taxes. In any given year most active funds underperform markets they set out to beat, especially after fees are subtracted. An index fund is a mutual fund that mirrors as closely as possible the performance of a stock market index. Index investors are content with the average performance of a market.