Index funds pool money from many investors to buy a broad slice of the market. Instead of picking individual stocks, you own hundreds or thousands of companies at once.
This approach gives you instant diversification and lower fees than most actively managed funds. Over time, many index funds outperform the average active fund because costs are so low.
For long-term investors, index funds are a simple, hands-off way to build wealth. You can start with broad market funds and add bond or international funds as your portfolio grows.