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this post was submitted on 07 Jul 2025
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How do you know how to invest? Asking for a friend.
I don’t. I do it the boring way - buying cheap, highly diversified ETF index funds.
That's way more than most people know... Also, wtf is an ETF?
Mutual funds and ETFs are both types of investments that represent a group of individual stocks and are generally managed in some way, either by a person or by a fixed algorithm. Mutual funds have some tax implications that can by annoying for people so ETFs tend to be preferred for taxable accounts (in the US at least).
Exchange Traded Funds, basically these funds pool money from a lot of small investors and give you diversified portfolio. Basically if you try to mirror S&P 500 yourself, it'll require about a few hundred thousand dollars to manage, but by pooling with other people you can have S&P 500 level diversification for 100$
Thanks! Yes, I was wondering where would be a good place to start for absolute noobs, thanks for the tip. Investing is a mystery in my life I've been conditioned not to try to understand, perhaps it's time to do something about it.
Its pretty easy if you go with something like wealthfront, betterment, etc...
But using something like fidelity is also good too.
It's not too bad. The key thing if your in the UK is to open a stocks and shares ISA (similar to a cash ISA, but for stocks) that means you don't have to worry about taxes.
Other than that... Be aware that things are very volatile due to trump. He can say something and stocks drop 10% then recover by the end of the month.... Or not.
If you are in for the long term, the worst thing you can do is panic and sell when that happens.
Buy into a broad market tracking ETF (something that tracks s&P 500 or 1000 or similar). That way you're not betting on individual companies, your betting on the collective largest companies in the world doing well. Over a long period of time, which for over a century has averaged ~7% inflation adjusted return yearly.