Ask Yourself These 3 Questions Before Buying Your Next Stock

When it comes to building an investment portfolio, you have choices. You could load up on index funds, or you could buy individual stocks.

The benefits of choosing index funds is getting to own a whole bunch of different companies with a single investment. If you buy shares of an S&P 500 index fund, for example, you'll effectively own 500 different companies.

Index funds are great because they take a lot of guesswork out of investing, and they don't require the same intense research individual stocks do. But if there's one clear drawback to index funds, it's that they won't let you beat the broad market. That's because their goal is to match the market's performance, not exceed it.

Source Fool.com