If there’s one idea that does the heavy lifting in building your GLOW number, it’s the low-cost index fund. Here’s the plain-English version.
What an index fund actually is
Instead of trying to pick winning companies, an index fund simply buys a tiny slice of all of them in a given market — say, the 300 largest Australian companies, or thousands of companies worldwide. You own the whole market, at a very low cost.
Why this beats most active strategies
The uncomfortable evidence is that the large majority of active fund managers underperform the index over long periods, especially after fees. By owning the market cheaply, you quietly outperform most people who are trying much harder.
ETFs vs managed index funds
In Australia, most people access index investing through ETFs (traded on the ASX) or their managed-fund equivalents. Both are fine; the differences come down to how you buy them, minimums, and small cost and tax nuances.
The GLOW way to use them
Pick a simple, diversified, low-fee core. Automate regular contributions. Then largely leave it alone — time in the market beats timing the market. Boring, consistent, and remarkably effective.
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This article is general information only and does not take account of your personal circumstances. It is not financial advice.