Deciding Between Stocks and Index Funds? 3 Questions to Ask Yourself

Investing your money in the stock market is an essential part of building wealth for most people. But you have choices about how to get exposure to equities.

One option is to buy shares of stock in individual companies. Another is to purchase index funds. These funds track various financial indexes, such as the S&P 500, and the goal of the fund is to mimic the performance of the index -- usually by buying shares in all of the companies included in it.

Deciding between buying stocks and purchasing index funds isn't always easy. When making the call, there are three key questions to ask yourself to pick which investing strategy is the right one for you.

Source Fool.com