I’m a complete newbie. The only “investing” I’ve ever done is use HYSAs. Obviously the yield there, while pretty good, isn’t as good as investing in say, the S&P 500. So I want to invest a chunk of my savings into that and just leave it there until I retire. I’m not really looking into daily/active trading or anything. The problem is I don’t know how fees work with brokers.
I saw this graph a while ago so I was thinking of Fidelty. It also helps that I already have an account there for my employer RSUs and my 401k. On the other hand, a colleague of mine suggested Schwab and said they don’t have any fees.
Can anyone suggest the best broker (minimal/no fees, easy-to-use, set-and-forget) that I should go with if I just want to invest in the S&P 500?
Just a tip, don’t dump it all in at once. Spread it out over 12 months or so. This will prevent losing too much money when the market crashes. It is called dollar-cost averaging.
There’s quite a bit of research on lump sum investing vs dollar cost averaging. Here is one example: https://investor.vanguard.com/investor-resources-education/news/lump-sum-investing-versus-cost-averaging-which-is-better
Generally lump sum investing comes out ahead by a bit. However, my personal opinion is that it isn’t enough to always point to it and say that’s what you should do. If you’re more comfortable doing one over the other, then do it.
Generally time in the market beats timing the market, which is what you’d be doing by dollar cost averaging because you think the market is going to crash.
The ‘dollar cost averaging’ narrative started as a response to people who wanted to hoard a portion of their monthly paycheck waiting for a good time/correction to buy into the market. It’s essentially a corollary of ‘time in market beats timing market,’ and both could be stated as ‘invest it all, right now.’ Especially if your horizon is 10+ years out: a few percentage points today is nothing to the doubling you can expect in a decade.
Thank you! That’s a good idea and I will keep that in mind.