Three Winning Portfolios

These index funds will help you meet your short-, medium- and long-term savings goals.

As miserably as Standard and Poor's 500-stock index has performed recently, it still has beaten two-thirds of big-company U.S.-stock funds over the past five years. And that, in a nutshell, is why simple portfolios of index mutual funds still make sound financial sense for many investors: They're a dependable way to get better-than-average returns.

Index funds seek to mirror a variety of barometers of the stock and bond markets. Rather than attempt to outpace the markets, these funds aim to match the performance of their indexes -- saving you the time and effort of trying to pick actively managed funds that you hope can consistently outperform the markets. Funds that are actively managed often beat their benchmarks over short periods of time, but few of them outperform over the long haul.

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Bob Frick
Senior Editor, Kiplinger's Personal Finance