Index funds have become a major force in the investing world. What, precisely, does this mean and why should new investors care? What are the benefits of investing in index funds? What are the drawbacks? These are some of the most important questions you’ll face considering that you are going to need to seriously give index funds a look, especially if you are a smaller investor of modest means. In the next few minutes, I want to walk you through how I think about index funds — the good, the bad, and the ugly — to help you gain some perspective. An index doesn’t actually exist in a sense.