The graphs below explain the logic behind index funds.

In June 1921, the Dow Jones Industrial Index which is made up of America’s 30 largest companies, was at 68 points.

In June 2021, 100 years later, the Dow Jones Industrial Index which is made up of America’s 30 largest companies, was at 34,502 points……

So, 68.45 points in June 1921…..

Fast forward 100 years…..

it is at 34,502.51 points. Imagine buying an index fund 100 years ago in the Dow 30….