I guess this is a good place to ask: For someone who knows nothing about the market, what would be a good way to invest their money? From the responses here, I'm guessing "park them in an index fund", but is there a trustworthy company I can talk to that will do that?
I would recommend Invest Like a Pro (10 day investing course) [1]. It's written by the founder of YNAB, and gives a really good introduction to different types of funds and investment vehicles.
Hello StavrosK - I recommend you find an RIA (Fee Based Fiduciary Registered Investment Advisor) who offers DIMENSIONAL FUNDS = DFA. www.dfaus.com they are NOT really 'passive' and they are NOT really an 'indexer' - yet - over an extended period of time their funds have demonstrated outperformance when compared to their relevant benchmarks
You could do a lot worse than parking it in an index fund, so yeah, that's a good approach :) If you have a 401(k) or other retirement account, it is quite common for those to offer an S&P 500 index fund where you could invest your money. If you want to do it in a taxable brokerage account, you should open an account with Vanguard and buy their Total Stock Market index fund (VTSMX, or VTSAX if you have more than $10,000 to invest).
Then stay the course - if the market tanks 50% the day after you put your money in, don't panic. Wait it out. Your investment horizon here is at the very least 10 years.
But that's the quick, the-best-time-to-invest-is-tomorrow-so-just-do-it answer.
There are a number of things you should do if you want to learn more about how to invest your money in stocks (and maybe bonds):
0) A good resource to get started quickly is If You Can, by William Bernstein:
But you can skip it if you want to dive deeper with the stuff that follows.
1) Learn about what investing in the stock market means, what's the nature of it and what to expect from it. I have two recommendations here:
1.1) jlcollinsnh's Stock Series: http://jlcollinsnh.com/stock-series/ He recently released a book (The Simple Path to Wealth) which is supposedly a better-edited version of the Stock Series. He's a rather optimistic guy, but what he says is not wrong. He stays away from investing in non-US markets, which is not the most common position among indexers.
1.2) A Random Walk Down Wall Street, by Burton Malkiel. It's an amazing book that everyone should read if they want to learn about the stock market. Many people recommend Bogle's books (he's the father of index investing), but I find them incredibly tedious to read.
2) Learn about the different investment accounts available to you - 401(k)/403(b)/457(b)s, IRAs, HSAs, taxable brokerage accounts. Each one receives different tax treatment and you should be familiar with that in order to avoid "tax drag" i.e. taxes slowing down the growth of your investments.
4) Don't obsess about it once you get started. After you've learned a few things it's tempting to start "tweaking" your investments here and there, but if you do that often you do yourself more harm than good. Invest your money then go have some fun :)
