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When looking for a sound investment opportunity that is relatively "hands-off", think about trying index fund investing. What is index fund investing? In plain English, index funds are a collection of stocks that are put together and made to mimic a certain stock index (i.e. Standard and Poor 500). Index fund investing has many advantages over other forms of investments, which include not only rate of return percentage performance, but also tax benefits and time commitment considerations.

The first advantage to index fund investing is that, overall, it outperforms the overall stock market. Index fund investing allows for great diversification within a portfolio, which historically is better for the bottom line. About.com states that Standard and Poor mutual funds outperform actively managed funds by 80%, not including tax benefits. While there is no guarantee that index fund investing will make a profit (after all, it mirrors the overall market - if it goes down, so does the index fund), the risk is lower than trying to buy and sells stocks based on high and low prices all the time.

Secondly, index fund investing has significant tax benefits. Each time a stock is bought and sold for a profit, capital gains taxes come into play. Since index fund investing relies on a "wait and see" concept, there are fewer transactions that will be taxed; therefore, meaning less of a tax burden each year when filling out those IRS forms.

Lastly, as implied by the first two advantages, the relative low maintenance of index fund investing makes it an attractive option for those who are willing to ride out the market for the long term. If one were try to match the market's performance through the purchase of individual company stocks, it would take more time than it would be worth. By lumping a group of sector stocks together in an index fund investment, the investor is saved the time and trouble from having to do extensive research and constant monitoring of both the individual stocks and the overall market.

Index fund investing is a great way to get started in the world of the stock market. The risk is lower than many other investment options, the time commitment is minimal and there are numerous financial advantages, both in the profit and tax arenas.