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Investing as a Beginner Does Not Have to Be Complicated
When you’re new to investing, the hardest part isn’t buying. It’s choosing what to buy without feeling like you’re about to mess everything up. I want to reassure you right now that you will not mess this up. Investing is not about timing the market or getting rich super fast. It’s about starting safely and staying consistent so you can build long-term wealth over time.
A Simple Playbook for Beginner Investing
There isn’t a true play-by-play for investing. Everyone’s situation and risk tolerance are different. However, when you’re starting out, diversification over picking individual stocks is the way to go. Diversification spreads your money across many companies and gives your portfolio a better chance to grow steady.
You don’t need many investments. Choosing one fund is enough to start. Boring is good. It means you’re doing it right. The simpler your investing strategy is, the less stress and overthinking you will deal with.
Beginner-Friendly Index Funds
FSKAX – Fidelity Total Market Index Fund
This index fund is a great way to dip your toes into investing. With FSKAX, you’re investing in thousands of U.S. companies without having to pick them individually. It also has an extremely low expense ratio (0.015%). FSKAX is the definition of “I don’t want to think about it” investing. This fund works best inside a Fidelity account.
FXAIX – Fidelity 500 Index Fund
FXAIX tracks the S&P 500, meaning it includes 500 of the largest and most established U.S. companies. It’s simple, familiar, and historically reliable for long-term growth. Like FSKAX, it also has a very low expense ratio of 0.015%.
VTI – Vanguard Total Stock Market ETF
VTI is a beginner-friendly ETF that gives you exposure to the entire U.S. stock market. It trades like a stock but can be purchased using dollar-based (fractional) investing, so you don’t need to buy a full share. This makes it accessible even if you’re starting small.
VOO – Vanguard S&P 500 ETF
VOO tracks the S&P 500 and is a favorite among long-term investors. Like VTI, it supports fractional investing at Fidelity, so you don’t need to buy a full share upfront. This is a solid option if you want exposure to large, established companies and plan to hold for the long run.
Target Date Index Funds (The Set It and Forget It Option)
If you don’t want to think about allocations at all, this is the easiest route.
Target date index funds automatically adjust risk as you age, becoming more conservative over time. Once you set up recurring contributions, they’re truly set-it-and-forget-it.
Fidelity Freedom Index Funds
Pick the year closest to when you plan to retire.
Stage Money Pick:
👉 The tool we use to estimate retirement year and match a target date fund
Beginner-Friendly Individual Stocks
If you’re feeling a little adventurous, these are optional additions. They are not required. These companies have stood the test of time and tend to be more stable than trend-based investments.
Individual stocks should make up a small portion of a beginner portfolio.
Apple (AAPL) Stock
An iconic stock that is established, profitable, and widely held by investors. While the share price has increased to $272.14, remember that you can always buy a slice of the share for as little as $5. AAPL is a stock that pays off long-term.
Microsoft (MSFT) Stock
Another great and stable stock to invest in as a beginner. Microsoft brings in diverse revenue as they are not reliant on one product type. One share of MSFT is currently $389.
Coca-Cola (KO) Stock
Coca-Cola is a slow growing stock but it has held stable and consistent in it’s returns to shareholders. The price of one share is currently $80.72.
What Beginners Should Avoid Investing In
If you were intimidated by investing beforehand it’s likely because of one of these stocks. I strongly recommend avoiding them while you are starting out in your investment journey. If down the line you have a good amount invested and want to branch out into more risky options, go for it.
You’ve seen the photos of multiple computer screens with a plethora of graphs pulled up. That’s day trading. Day trading requires constant attention, fast decision-making, and emotional control. As a beginner, it often adds stress without improving results.
Penny stocks have a chance of paying off but they are another risky stock to avoid early into your investing. These stocks are dirt cheap but there is a catch.
Another stock archetype to avoid is Meme stocks. It may seem fun and innocent but no, just no. A majority of the time these stocks don’t pay off and you end up losing out on more money than gained.
Lastly, Crypto. If we could all travel back in time and have our parents invest in bitcoin, the only crypto stock that’s performed well over the years, we would. Bitcoin aside, crypto stocks often yield more losses than gains. Plus it’s a whole different beast as it is digital currency that requires a different mode of access compared to your standard stocks.
If it’s being hyped aggressively online (looking at you Doge coin), it’s probably not beginner-friendly.
Start Small
You don’t need to pick the perfect investment. You just need to pick one solid option and start. Consistency beats panic buying and selling every time.
Investing is not a get-rich-quick strategy. It is usually slow, boring, and steady. That is exactly why it works.
Which investment are you starting with?
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