T. Rowe Price Equity Index 500 Fund (PREIX)

 ***Please make sure to do your research and consult a professional. I am not a professional and content is intended to be used and must be used for informational purposes only.****

PREIX is my go to when I am looking to invest more to my portfolio. It is my largest single holding. It is an Index fund the is based of the S&P 500. I am a believer that the everyday person is likely best off investing in a solid index fund for a big portion (or all) of their self managed portfolio. This is especially true for those that don't have time do the research for individual stocks but want the exposure to the stock market. The indexes historically have a much higher return than any other investment type and is easier than actively managing your portfolio. Index Funds are a great option for retirement accounts (more about that later). 

You can also choose different indexes that focus on different segments. Alternatively you can also look at mutual funds or ETFs.  Mutual funds are like index funds but tend to have higher expenses. EFTs have lower fees than Mutual Funds as it isn't actively managed. 

The reason I choose PREIX over other available funds is because I  personally tend to follow the S&P 500 over many other indexes. It also tracks well-known American based businesses representing a wide range of industries (safer & diversified). Other top indexes are Russel, Dow, NYSE, Nasdaq. There are international index funds as well.

Another reason I have chosen PREIX is because it doesn't have a minimum buy in and a low expense ratio. Expense Ratios represent the main cost of owning the fund and is subtracted from each fund shareholders returns as a percentage of the investment. In general index funds have lower expense ratios since it is managed to reflect the index it is based off but they can vary from fund to fund. Some index funds require a minimum investment. Ones with higher investment requirements tend to have a lower expense ratio. Over a long period (compounding factor) this could impact your overall return. If you have the money to invest into an index fund with a lower ratio you should but this is a good fund to start with.

PREIX does have a minimum hold time before being allowed to sell without penalty. Since I plan to hold long term this isn't an issue for me but should be considered when buying.

Summary:

-PREIX is an Index fund based on the S&P 500

- Doesn't have a min investment requirement

- Expense ratio (.19%) isn't the lowest but isn't the highest

-Index funds are great low cost options to not have to actively manage your account, don't have the time to do the regular research for stocks, and provides exposure to stocks

-9.57% standardized return since inception and 13% in last 10 year (just under the actual s&p 500)