Investing in the index is when you seek to replicate and hold a broad market index such as the S&P 500 or the S&P/TSX Composite Index. These indexes are a collection of stocks/companies. For example, the S&P 500 holds the 500 large-cap U.S. companies in proportion to their size (market cap). In index investing, you are looking to match the returns of the broad market rather than trying to beat the market.

The equity markets were up almost across the board in 2019 so anyone invested in index funds had a great year. For example, if you had an 80% equity, 20% fixed income type growth portfolio of ETFs you would likely have achieved over a 17% return in 2019! However, whether our portfolio did great (like last year) or poorly (like the year before), our perspective should be the same.