Ask the Fool

Q: I want to invest in an index fund, but I don't see one among the funds I can invest in through my 401(k) plan. Help!

- P.O., Akron, Ohio

A: You're smart to look for an index fund, as index funds based on broad market indexes (such as the S&P 500 or the "whole market") have trounced most stock mutual funds over long periods. They also tend to feature lower fees and low turnover. If you (and perhaps some co-workers) were to visit your company's 401(k) administrator and ask for an index fund or two, you might get them. Learn more about maximizing your 401(k) at www.fool. com/money/401k.

Meanwhile, you can also invest in index funds on your own. Head over to www.vanguard.com, for example, home of many funds with low fees and strong performance. Check out the Vanguard Total Stock Market index fund, for example (ticker symbol: VTSMX).

Beyond index funds, if you're looking for some promising mutual funds with outstanding track records and smart managers, drop by www.championfunds.fool.com or www.morningstar.com.

Q: When the stock market falls due to lots of selling, who's buying?

- G.K., Elizabeth City, N.C.

A: Generally, for every seller, there's a buyer. The stock market is like an auction, where shares trade at prices that buyers are willing to pay and sellers are willing to take.

That's why, if it's revealed that Buzzy's Broccoli Beer (ticker: BRRRP) engaged in fraudulent accounting, buyers will immediately decide that its shares are worth a lot less, and sellers will be able to unload them only at lower prices. You might want to wash your hands of Buzzy's, but there's probably someone who thinks it's a bargain at current low levels.

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