As Warren Buffet (aka the Oracle of Omaha) says: "it is simple, but it is not easy." Simple arthmetic suggests, and history affirms, that the winning strategy for investing in stocks is to own all of the nation's publicly held businesses at very low cost.

The strategy is simple; buy a fund that holds an all-market portfolio, and pretty much hold it forever. Such a fund is called an index fund. A good example is an S&P 500 Fund. More about this in later lessons.

Index funds are simply a basket (portfolio) that holds many eggs (stocks) designed to mimic the overall performance of the U.S. stock market. They eliminate the risks of individual stocks.

This investment philosophy we teach is simple, but it is not easy to follow. Especially with the excitement (however costly) of buying and selling stocks. The following lessons will give you a solid foundation on long-term investing.

Next Story: The Magic of Compounding

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