Index funds are responsible for saving investors like you and me untold billions of dollars in fees over the past couple decades. They’ve also spared us countless headaches. (I don’t know about you, but I’m glad I don’t have to pick specific stocks to get exposure to utilities or play the growth in India’s middle class.) And the best index funds … well, they’ve made us a lot of money, which is the point of it all.
The push into index funds has intensified to the point that some experts believe it’s not only driving the market higher, but it’s causing a valuation bubble. In short, if you buy into any fund (index or not), the fund must invest that money into more stocks — and all that buying is distorting valuations. The danger, then, is that when that bubble pops, many supposedly safe index funds will feel the pain worse than other parts of the market.
The lesson here is that the best index funds to buy for 2017 — and for the foreseeable future — aren’t all going to look the same.
Some top index fund picks will be so buy-and-hold-oriented that you won’t need to worry about the bubble popping in a year or two or three because you plan on holding for 20 years, maybe 30. Some of the best picks for next year will only be worth buying into for tactical trades of a week or two at a time. The best index funds for 2017? More like the best ones for mid-April!
So the following is a list of the best index funds for everyone — from long-term retirement-minded investors to click-happy day traders. And this includes a few funds that I either hold currently or have traded in the past.
In no particular order …