Why Not Just Pick A Stock?

It’s tempting to pick a stock you think (or have been told) is priced low and will beat the market providing a great return! But it’s unlikely you'll succeed. Think about it. You're up against market experts using AI analysis and powerful algorithms— that’s some tough competition!

Many Baskets

The saying "don't put all your eggs in one basket" applies here. Betting on one stock will wipe you out if it underperforms. Instead, spread your money across many stocks to stabilize your investment. Even if some stocks underperform the others can make up for it. This is called diversifying your portfolio.

Easy Diversification

Index funds make diversification easy. For example, an S&P 500 index fund spreads your single investment across the 500 largest US companies, including big names like Amazon, Apple, Microsoft, Nvidia, and Tesla.

Safe for the Long Term

Investing in index funds is considered safe for the long term. It’s important to note the market can be volatile short-term, but it generally grows over time. So don’t watch it too closely and definitely don’t panic during market dips. Selling off your investment locks in your losses. With an index fund, you want to stay invested for the long haul.

WHAT to Invest

The stock market is not ideal for money that you’ll need in the next few years due to short-term volatility. If you need to pull your money out during a dip, you’ll have to sell it at a lower gain or even a loss. Use a high-yield savings account for short-term savings.

WHEN to Invest

Timing the market is nearly impossible, even for experts. Instead, try a method called dollar-cost averaging. Invest the same amount regularly, regardless of market conditions. For example, invest $100 at the start of every month whether the market is up or down. That helps lower the risk of getting caught up in market volatility.

HOW to Invest

Want to start investing in the S&P 500 but don’t know how?
We got you covered! Check out this step-by-step guide to open a brokerage account with Fidelity and buy the SPY index fund.
https://www.money-muse.com/resources
Follow along and you’ll be invested in the S&P500 when you’re done!