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Index funds. You've heard it before because it's good advice.
Here's the serious answer as to why you should index instead of trying to beat the market: people are emotional, irrational, and impulsive beings. For whatever reason, this is even more true of people who are gung-ho on beating the market. The moment the inexperienced investor sees a substantial correction and witness their portfolio value cut by half, most WILL sell, guaranteeing that their paper losses are locked in.
You could, of course, turn your money over to "experts" to manage for you, but actively managed funds that charge 1 to 1.5 percent are always a bad idea because the fees will hamstring your portfolio's growth; it's hard enough for a fund manager to beat the market, it's even harder for that manager to beat the market AFTER accounting for fees.
That's why you should index. The market tanked and your portfolio took a beating? So did everyone else, so less fomo there. By buying an index, you're betting on the market itself as opposed to any company. The only way you can lose is if the entire market fails and the global economy collapses. It's as close to a sure thing as you can get in finance that still provides sizable returns. If your aim is to invest long term, indexing is the way to go.
Inteligent Investor and Securities Analysis.
I also recommend the options primer on E*trade. Those 3 things combined account for 95% of my success.
Truly, picking stocks based on complex ratios, data analysis, etc. is no better than using Tarot cards to pick stocks. There have been countless studies that prove there’s no statistically better method than the index funds for market performance.
What are you trying to do with this money? Just like in consulting, we start with the needs and goals of the client.
Where does one start with index funds?
can’t go wrong with SPY or VOO
Start with trying to approximate the total stock market using the index funds available to you — here’s a link to the wiki on how to do it: https://www.bogleheads.org/wiki/Approximating_total_stock_market
For example, this is my setup to approximate total stock market:
- 80% 500 Index
- 20% Extended Market Index
I've always wanted to have the time to learn and implement Lyn Alden's trading strategies. She grew up living in a trailer and is now doing very well