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[MUSIC]
Hi my name is Nathaniell and this is One More Cup of
Coffee, where we talk about online business, making
money on the internet and financial independence.
So I know most of my videos so far have been
all about online business and how to get your website started.
But I wanted to mix things up today and talk a little bit about investing
because eventually I'd like to start blogging
more and doing more videos on simple investing.
And I wanted to show you two things, one I wanted
to show you this cool service that you can sign up
for that's totally free and two I wanna show you why
you should probably invest in index funds instead of individual stocks.
So the service I wanna show you
is called SigFig, you can see the bookmark there on my bookmark toolbar.
And we'll head over there in a second. Then, I wanna show you the graphs that.
It's gonna graph out my stock investment versus the S&P 500.
So if you don't know what the S&P 500 is,
it's an index that tracks the 500 largest US companies.
Basically a index Is, as far as I understand
it, it's a, a group of stocks that is supposed to track a particular section
of, or a particular sector of, of the market. So, for example, you can have.
You can have a fund that tracks homebuilders, or you can have a fund that tracks precious
metals, or you can have a fund that tracks European stocks or something like that.
So,
the S&P 500, there's.
The whole history to it, about how it got started it and, and what not.
But what you need to understand about S&P500
is that because it tracks the 500 largest U.S.
companies that it's a pretty good indicator of how the economy's doing.
[MUSIC]
And it's also one of the most popular index finds to buy into,
basically you can buy it and leave it there without worrying about it.
You know, if the market goes up, SP goes up, market goes down, SP goes down.
It's that simple.
And another index fund that might behave in a similar.
Similar way would be the total US stock market, so it would
be a mutual fund or an index fund that basically tracked the
behavior of the entire US stock market. So there'd be a greater mix of stocks.
But, so, let's head over and see what my
portfolio looks like compared to the S & P 500.
So doing this basically compares my performance versus the, the U.S.
stock market as a whole. So you can see here on Thursday that it
actually gained less than the S&P 500 by 207%.
Then if we move on to Friday, you can see here that I actually lost
[MUSIC]
.28% and as the peak gain, .07, so I missed the
S&P again. Then if we look at, on a monthly basis
and see over the past month, again, I missed
the S&P 500 by a 10th of a percent. On a 3 month
basis, it's even worse. Where I made only 2%, and
S&P gained 8%, and if you look at a yearly basis, I only
started investing near the end of January, so I have only
made less than 4%, 3.47% and the S&P 500 has gained 16% over
the past year. So although I have all these stocks here,
[MUSIC]
All these mutual funds, I thought I was gonna diversify and get some riskier stocks.
[LAUGH]
I actually performed a lot poorer than if I had
just invested all of my money in the S&P 500.
So although I like investing, and I like choosing stocks, and
I like the risk, and stock investing is a hobby for me.
For a beginner investor who doesn't wanna learn about investing and doesn't
know very much, buying an S and P 500 low cost index fund is not a bad way to go.
Now just to be fair,
the S and P has done >>
[MUSIC]
>> Has done very well over the, over the past year or so.
So it's not guaranteed to perform like this in the future.
But for the past 50 years or so, it's basically been
one of the most used benchmark funds in the stock market.
So if you're gonna invest in a, in a.
[INAUDIBLE]
then the S & P is the way to go.
And whatever mutual fund service you sign up for, they're going to have some kind
of, either a mutual fund or an index fund, that tracks the S & P.
So, I hope you found this useful.
If you have any questions about stocks or stock investing you can go ahead and ask me.
As I said, I'm not a professional investor, this is just a hobby of mine.
And you can see by my performance chart here that I probably
don't have the best advice, but I can try to answer
any questions that you might have and we can compare
ideas. So, I'm looking forward to hearing from you.
[MUSIC]