Beginner Investing

[glitzy07]

I'm thinking that I would like to start some investing that is outside of my retirement accounts, but am paralyzed at how to actually handle. Both mine and H's retirement investments are currently in target date funds because I'm not very investment literate, but I'd like to learn more about it!

I have some fun money that I've been saving up and don't really have a specific purpose for. H and I do "yours, mine, and ours" money where we both get a small amount of fun money each paycheck to spend on whatever we want. He's is ALWAYS gone by the next paycheck, but I always have something left over. A while ago I started moving anything remaining from the previous paycheck to savings once we got our new direct deposit, and now I have about $2500 in "my" savings. I don't want to use all of it because eventually I want to use it for some travel or something, but since I'm consistently adding to it I won't miss something like $500.

Is $500 enough to start with or is it not even worth it?

My retirement is with Fidelity Net Benefits. Should I just try to open a brokerage account with Fidelity and choose an index fund? Or with that small amount should I do something like Robinhood? Does Robinhood have index funds or is that just riskier single stocks (I'm NOT a gambler, so I'm looking for a diverse portfolio no matter what I do).

TIA for any advice you have for a beginner!

[goldengirlz]

Different platforms will have different minimums, so you’ll need to do some Googling. I’m not sure about Fidelity, but I use TDAmeritrade and their website says they don’t have a minimum to open an account.

The only “problem” with starting with a low amount is that you might not be able to buy more than a couple of ETFs. For example, VTI, a popular ETF that tracks the stock market, is currently trading above $225/share. But that said, H and I often buy small numbers of ETFs at a time (I usually buy them in increments of five — no real logic behind that number though.)

ETA: I’ve also been pretty happy with VYM, which tracks companies known for paying high dividends. It’s trading at $105/share so you could get a nice number for $500 and keep adding to it each month or so.

[winemaker06]

Fidelity is a great place to start, and I’ve used it for the same reason, having the NetBenefits account already.
I agree that starting with a small amount might limit your choices, but I think there are some decent Fidelity Zero index funds with no minimums. That might be a good place to start.
I usually subscribe to the Boglehead index investing philosophy though. A lot of people are doing the Robinhood thing!

[mccallister84]

For us it was easier to use fidelity because that’s where the 401k and HSA are. We just buy into an index fund.

[gt7301b]

What are your goals with this money?  Are you looking to find the next Amazon or are you just hoping for solid returns?

We mainly invest in index funds, but I do a bit of single stock investing, that we try and keep to less than 10% of our total portfolio.  Fool.com is a good resource.

I would open an account at Fidelity or Vanguard as a starting place and then determine what type of investments to purchase.  I would NOT open an account with Robinhood. 

[Cappy]

It is so easy to open a taxable brokerage account with Fidelity. Fidelity has FZROX which is their zero total market index fund. Shares are trading at about $15.80 so you could grab some of them but what you buy really depends on your goals and how you want to allocate these funds. When you set up the brokerage you'll need to pick a core position for your cash holdings. I just did SPAXX. I feel like it's a really easy interface.

[glitzy07]

Jul 12, 2021 20:45:41 GMT -5 gt7301b said:

What are your goals with this money?  Are you looking to find the next Amazon or are you just hoping for solid returns?

We mainly invest in index funds, but I do a bit of single stock investing, that we try and keep to less than 10% of our total portfolio.  Fool.com is a good resource.

I would open an account at Fidelity or Vanguard as a starting place and then determine what type of investments to purchase.  I would NOT open an account with Robinhood. 

I'm just hoping for solid returns! I'm definitely most interested in index funds because I'm pretty risk averse when it comes to money and I don't think single stock investing would be for me. That said, I know that I'm starting with an amount of money that wouldn't kill me to lose.

I ended up opening an account through Fidelity after winemaker06 mentioned how easy it was in conjunction with a 401k account already being there. I'm currently waiting for my bank account to be verified and then I'll have to figure out investments.

Another question - if I'm looking at index funds specifically, would it be better to buy multiple shares of the same one or to diversify (even though the index funds are already diversified) and buy a share of a few different ones?

TIA!

[Cappy]

Also, I tend to fangirl Paula Pant but she breaks down some stock basics in this post for newbies and I feel like it's an easy read: affordanything.com/how-to-start-investing-in-stocks/

[glitzy07]

Jul 13, 2021 9:35:17 GMT -5 Cappy said:

Also, I tend to fangirl Paula Pant but she breaks down some stock basics in this post for newbies and I feel like it's an easy read: affordanything.com/how-to-start-investing-in-stocks/

This is very helpful! Thank you!

[gt7301b]

Jul 13, 2021 9:05:36 GMT -5 glitzy07 said:

Jul 12, 2021 20:45:41 GMT -5 gt7301b said:

What are your goals with this money?  Are you looking to find the next Amazon or are you just hoping for solid returns?

We mainly invest in index funds, but I do a bit of single stock investing, that we try and keep to less than 10% of our total portfolio.  Fool.com is a good resource.

I would open an account at Fidelity or Vanguard as a starting place and then determine what type of investments to purchase.  I would NOT open an account with Robinhood. 

I'm just hoping for solid returns! I'm definitely most interested in index funds because I'm pretty risk averse when it comes to money and I don't think single stock investing would be for me. That said, I know that I'm starting with an amount of money that wouldn't kill me to lose.

I ended up opening an account through Fidelity after winemaker06 mentioned how easy it was in conjunction with a 401k account already being there. I'm currently waiting for my bank account to be verified and then I'll have to figure out investments.

Another question - if I'm looking at index funds specifically, would it be better to buy multiple shares of the same one or to diversify (even though the index funds are already diversified) and buy a share of a few different ones?

TIA!

At the amount you mentioned above I would just put it all in a single S&P 500 index fund and call it a day.

[smock]

I did the same thing for the first time a few months ago! I also opened an account with Fidelity since I had retirement accounts with them. I put most of the money into an S&P 500 index fund and then picked a few other recommended index fund, including a clean energy one and a tech one. I don't remember the names, lol, if that says anything about my investment strategy. But it's been a fun introduction and I'm thinking of moving over more funds soon.