There’s no quibbling with the popularity of index funds — for investors seeking a simple approach to investing, these vehicles are a real boon.
But they can also help those of us who still try to beat the market, especially when we’re already holding a stock before it gets added to a major index …
Remember, many passive managers will buy the stock once it goes into their target benchmark. The resulting stampede can result in a nice pop in the stock’s price. That’s especially true in the case of additions to the S&P 500 since so much money is tied to the index! See what other dividend index funds area popular by reading our article on “A Little-Known Benefit of Stock Indexes “.
To to your dividend investing success,
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