Help with choosing index funds?

[tim126]

I am a passive and new investor, so I would like to invest in index funds. My plan is to hold them for one or two years, and then decide whether to keep or sell them according to the situation then.

I saw Fidelity put FUSEX on top of its sector index funds. FUSEX is an index fund for some biotechnology companies, and has done quite well in the past few years. But I was worried if it is too high to buy it now?
What is behind its good performance these years?
How likely would you think it will carry over in the next one or two years?

I also think I should try some relatively safe index funds. I saw on the internet that someone said if you don't know how to invest, then invest in a S&P 500 index fund, which in the past has outperformed most mutal funds.
S&P 500 index fund is still risky though, so is it a good timing to buy some now, or do you think it is too high to buy?
Which S&P 500 index fund would you recommend? I saw Fidelity put FUSEX on top of its list.

Thanks in advance for your advice!

[disneysteve]

I am a passive and new investor, so I would like to invest in index funds. My plan is to hold them for one or two years, and then decide whether to keep or sell them according to the situation then.

That is called market timing and is a plan that few if any regulars on this site support. You say you are a passive investor. If that's true, invest in index funds and keep investing from now until you retire. Don't worry about "the situation" now, 2 years from now, or 10 years from now. Jumping in and out of funds based on market conditions is exactly what you don't want to do.

[feh]

Ditto what Steve said.

You need to do some reading. Start here: http://www.bogleheads.org/wiki/Bogle...g_start-up_kit

[DisciplinedSaver101]

All S&P 500 Index Funds are basically the same. They all invest in exactly the same stocks. The main difference is the fee they charge. Schwab.com charges about the lowest fee, at 0.09% annually.

[feh]

All S&P 500 Index Funds are basically the same. They all invest in exactly the same stocks. The main difference is the fee they charge. Schwab.com charges about the lowest fee, at 0.09% annually.

You can do better than .09, depending on how much you have to invest.