Index Fund Investing for beginners: This is one of the best investments that requires very little work, almost no skill, and has some of the best overall returns. Here’s why - enjoy! Add me on Instagram: GPStephan
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What IS an index fund?
An index fund is basically just a group of investments that you can invest your money into, and then you’ll own a small percentage of the entire thing. Index funds track the entire market as a whole, rather than one specific stock.
Why Invest in an Index Fund: They have very low fees.
This is because indexes are very simple to put together, very simple to manage, there isn’t much overhead, and those savings get passed on to you. This is also what’s known as a PASSIVELY managed fund. You’re getting an entire portfolio of stocks that automatically gets balanced and adjusted over time, without doing any work, and you pay as low as 0.04% annually.
This is the opposite of a MUTUAL FUND, which employs professional stock pickers who aim to generate market-beating performance. However, the additional overhead expense associated with this, as well as the fees incurred by buying and selling, ultimately gets passed on to you, as the investor, in the form of higher fees. And that is WITHOUT the guarantee of actually beating the market.
Second Advantange: The majority of investors will get a HIGHER return long term with an index fund than they will by investing in individual stocks on their own.
Several studies have suggested that over 92%-95% of portfolio managers could not out perform the market index over a 15-year period. And these figures are SO MUCH WORSE for the average individual investors.
Third Advantage: Diversification.
Even if you have 20 individual stocks in your portfolio, one of them dropping in price could cost you a lot of money. On the other hand, if you buy the SP500 500 index fund, your investment will depend on 500 different stocks, only three of which account for more than 2% of the entire index. This means having a few companies go down or up won’t make a huge difference in your portfolio, but you get the advantage of riding the entire market as a whole as they rise in value over time.
Fourth Advantage: It’s easy.
I also acknowledge that I am not a stock market expert. I cannot buy and sell stocks that will consistently beat the market long term, nor do I have an interest in spending that much time watching stock charts and reading news so I can make the proper decisions.
Source: https://mymoneywizard.com/3-fund-portfolio/
How to do this:
My favorite index fund investing method is called THE THREE FUND PORTFOLIO:
* US Stocks: Vanguard Total Stock Market Index Fund (VTSAX)
* International Stocks: Vanguard Total International Index Fund (VTIAX)
* Bonds: Vanguard Total Bond Market Index Fund (VBTLX)
That’s it. This gives you the broadest diversification at the absolute cheapest cost. Not only that, but because you’re investing in multiple asset classes, you’re diversified through three mostly uncorrelated markets, and that protects you against any swings from one individual market.
Sources:
TIME IN THE MARKET beats TIMING the market: Charles Schwab.
https://www.schwab.com/resource-center/insights/content/does-market-timing-work
Warren Buffet Millionaire Bet:
http://fortune.com/2017/12/30/warren-buffett-million-dollar-bet/
Beating the market:
http://www.aei.org/publication/more-evidence-that-its-very-hard-to-beat-the-market-over-time-95-of-financial-professionals-cant-do-it/
https://www.marketwatch.com/story/individual-investors-are-destroying-their-wealth-2012-10-19
For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness @gmail.com
My ENTIRE Camera and Recording Equipment:
https://www.amazon.com/shop/grahamstephan?listId=2TNWZ7RP1P1EB
The YouTube Creator Academy:
Learn EXACTLY how to get your first 1000 subscribers on YouTube, rank videos on the front page of searches, grow your following, and turn that into another income source: https://bit.ly/2STxofv $100 OFF WITH CODE 100OFF (Limited Time Only)
Merch: http://www.GrahamStephanStore.com/
What IS an index fund?
An index fund is basically just a group of investments that you can invest your money into, and then you’ll own a small percentage of the entire thing. Index funds track the entire market as a whole, rather than one specific stock.
Why Invest in an Index Fund: They have very low fees.
This is because indexes are very simple to put together, very simple to manage, there isn’t much overhead, and those savings get passed on to you. This is also what’s known as a PASSIVELY managed fund. You’re getting an entire portfolio of stocks that automatically gets balanced and adjusted over time, without doing any work, and you pay as low as 0.04% annually.
This is the opposite of a MUTUAL FUND, which employs professional stock pickers who aim to generate market-beating performance. However, the additional overhead expense associated with this, as well as the fees incurred by buying and selling, ultimately gets passed on to you, as the investor, in the form of higher fees. And that is WITHOUT the guarantee of actually beating the market.
Second Advantange: The majority of investors will get a HIGHER return long term with an index fund than they will by investing in individual stocks on their own.
Several studies have suggested that over 92%-95% of portfolio managers could not out perform the market index over a 15-year period. And these figures are SO MUCH WORSE for the average individual investors.
Third Advantage: Diversification.
Even if you have 20 individual stocks in your portfolio, one of them dropping in price could cost you a lot of money. On the other hand, if you buy the SP500 500 index fund, your investment will depend on 500 different stocks, only three of which account for more than 2% of the entire index. This means having a few companies go down or up won’t make a huge difference in your portfolio, but you get the advantage of riding the entire market as a whole as they rise in value over time.
Fourth Advantage: It’s easy.
I also acknowledge that I am not a stock market expert. I cannot buy and sell stocks that will consistently beat the market long term, nor do I have an interest in spending that much time watching stock charts and reading news so I can make the proper decisions.
Source: https://mymoneywizard.com/3-fund-portfolio/
How to do this:
My favorite index fund investing method is called THE THREE FUND PORTFOLIO:
* US Stocks: Vanguard Total Stock Market Index Fund (VTSAX)
* International Stocks: Vanguard Total International Index Fund (VTIAX)
* Bonds: Vanguard Total Bond Market Index Fund (VBTLX)
That’s it. This gives you the broadest diversification at the absolute cheapest cost. Not only that, but because you’re investing in multiple asset classes, you’re diversified through three mostly uncorrelated markets, and that protects you against any swings from one individual market.
Sources:
TIME IN THE MARKET beats TIMING the market: Charles Schwab.
https://www.schwab.com/resource-center/insights/content/does-market-timing-work
Warren Buffet Millionaire Bet:
http://fortune.com/2017/12/30/warren-buffett-million-dollar-bet/
Beating the market:
http://www.aei.org/publication/more-evidence-that-its-very-hard-to-beat-the-market-over-time-95-of-financial-professionals-cant-do-it/
https://www.marketwatch.com/story/individual-investors-are-destroying-their-wealth-2012-10-19
For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness @gmail.com
My ENTIRE Camera and Recording Equipment:
https://www.amazon.com/shop/grahamstephan?listId=2TNWZ7RP1P1EB
This was the first place I learned about index funds. It started this whole journey for the next few years or so of reading and learning a ton about index funds, the F.I.R.E movement, real estate investing etc. thank you Graham for sharing this very valuable info with us. 😁👍
On top of all these investments, bro is also making MADDDD YouTube money damn
The minimum invest is $3,000 for the stocks mentioned is that accurate?
Thank you for keeping it simple, and for noobs like me to get clarity within 10-15 minutes on a subject that people have written 100s of books, and continue to.
I'm having a bad year; TSLA is down by $40k, ALLP is down by $35k, Draft Kings is down by $6k, NIO is down by $15K, ABML is down by $8K, and my husband is unaware. I'm only clinging to Jim Cramer's advice regarding opportunities during erratic market conditions in the hopes that I can either wait for a recovery or choose profitable investments to make up for my loss.
AI can predict
Thanks for the video lesson Graham
I started buying a REIT VNQ I put in $300 every paycheck currently own 10 shares and plan on picking up aton more. Im working towards early retirement. Yes I do have a 401k and roth ira from my employeer but I dont plan on being a slave to the system till im in my 70s im 24 and plan on being well off in my late 30s/40s
Still valid on 2023?
Legends to embrace if you want to get rich investing Stephen and Gary Joe Wilde. Unfortunately, don't know why Gary chose not to own a video channel here like other pros. He is long-established and very advanced in the field.
I recently inherited almost $500k. I REALLY need to make this money work for me, and not just disappear over time. I've been scrambling for somewhere to put the money, where I can make an effort to use the gains to pay bills so I can quit my job . All roads have pointed to the financial market of some sort which is a good idea buh where else should I put money besides the financial market?
The quickest way to make your first millions is to invest directly with an expert that is trustworthy and has made a name and individual billionaires. I realized that the secret to making a million is making better investment.
Do you have any other alternative other than vanguard because its not available in my country
Year-over-year inflation stood at 6.5% in December 2022—the lowest that figure has been in more than a year. Inflation was in line with what economists expected and gave many of them a reason to believe that the peak of inflation may be behind us. I have approximately $150k stagnant in my port_folio that needs growth. What is the best way to take advantage of this downturn?
Understanding personal finances and investing will most likely lead to greater financial independence. By being knowledgeable about money and investing, individuals can make informed decisions about how to save, spend, and invest their money.
Our government has no idea how people are struggling right now! A lot of people are financially struggling to live, keep a roof over their heads, I appreciate Analia Harlod You've helped me With your advices imagine investing $1000 and receiving $8,150 in 3days
Recently started out an investment manager and it turned out to be exactly what I was looking for. When I look back, 😢 On over 150k my rate of return 3/1.5 % on buy & hold. Disaster. Long story short I wish I could have took this path long ago. The positioning is just different and I know that this will get me on the right track.
You still recommend ?
*US Stocks: Vanguard Total Stock Market Index Fund (VTSAX)
International Stocks: Vanguard Total International Index Fund (VTIAX)
* Bonds: Vanguard Total Bond Market Index Fund (VBTLX)
Graham you are funny af 😂
Buy, hold, hold, buy, buy, hold and hold. Love it! 😂💪🙌👍🙏👏👏
As I would see it, the go to solution for climate this downturn and high expansion is momentary exchanging, rather than long haul exchanging, most people utilizing these methods are netting a lot of gains, sure the dangers are higher yet once more isn't the ongoing business sector similarly as unsafe?
I have a question, did the s&p 500 ever have a stock split ?
2023 is nearly here, with the recession and all would you currently invest in the an index? Date: Dec,13,2022
LOL when he said "basic" it flashed to a girl holding Starbucks