Can’t select stocks? Investing can still make you rich
Figuring out how to invest your money can seem daunting when there are so many different types of assets to buy. And if you don’t know how to research individual companies, you may feel that putting your money on the stock market is just too risky.
But there is also a huge cost to not buy stocks because it can be difficult to get the returns you need to build wealth if you don’t put your money in the market. The good news is that you can become a wealthy investor even without a lot of specialized knowledge. This is because there is a simple option that almost anyone can find how to invest.
How to Become a Successful Investor Without Picking Stocks
If you don’t want to research individual stocks or spend time researching companies, the best and easiest way to keep your wealth growing by investing is to put your money in exchange-traded funds (ETFs). .
ETFs trade like stocks. But when you buy an ETF, you don’t get a stake in a single company. Instead, the fund you choose will have a specific goal and spread your money around many different assets designed to achieve that goal.
For example, there are ETFs that track the S&P500. It is a financial index created by Standard & Poor’s to measure the performance of approximately 500 of the largest American companies. When you buy an S&P ETF, the money you’ve invested buys a very small stake in all 500 of those companies.
There are also hundreds of other ETFs, including those that track other financial indices or are designed to provide exposure to specific sectors. This includes ETFs that invest your money in small businesses, mid-sized businesses, emerging markets, real estate, bonds, cryptocurrency-related businesses, the cannabis industry, healthcare, and just about anything you can imagine.
The advantage of ETFs is that it is very easy to find ones that match your investment goals and interests. If you want to be fairly conservative in your investments, for example, you can build a very low-risk portfolio by dividing your money between an S&P 500 fund and a bond fund.
But if you’re interested in specific industries that you think will outperform the market as a whole, you can invest in them without having to do a ton of research. If you think the cannabis market is about to explode, you can buy a marijuana ETF and instantly get invested in growers, distributors, and researchers working in the field without having to wade through tons of details about the individual cannabis companies.
Because ETFs spread your money around, buying them is almost always less risky than investing in stocks. You can achieve diversification with much less effort. And most brokerage firms have ETF screeners that allow even novice investors to choose the right funds in minutes by searching based on fund objectives, fees, and past performance.
Now, because you’re buying a stake in so many companies with most ETFs, you’re unlikely to significantly outperform the market, because not all companies in the fund will see big increases in value. But you don’t have to beat the market to get rich investing if you buy ETFs consistently over time and take a responsible approach to balancing risk and potential rewards.