100 · Invest in stocks, bounds, funds, etc.

Here’s a start-up guide to help you invest in stocks, bounds, funds, etc., and launch your financial product investment journey, whatever your means and knowledge in this field. If you’re new to the game, this article will give you all the information and explanations you need to help you get on track quickly. You’ll also find valuable advice and a small glossary (at the end of the article) containing definitions of some of the technical terms used here, which will help you to understand certain subjects better.

• Here's the program
• First and foremost
• How to invest profitably?
• Investment objectives
• Risk profile
• How much to invest?
• Is there a minimum amount to start investing?
• Various fees
• Which financial products to invest in?
  • Shares (or Stocks)
  • Bonds
  • Other financial products
  • Investment funds
• How to invest in stocks, bounds, funds, etc. profitably?
• What’s the right choice between a trading platform and a financial advisor?
• What are the best investments?
• Tips and tricks
• Glossary
• Conclusion
• EcoTips
• Pros and Cons
• Information recap

First and foremost

I’ve been planning to publish such an article for some time now. After all, it’s a very popular idea that has made quite a few people rich, so it was only logical that it should be part of sweekr’s catalog of “money-making ideas”. But as it’s a subject I had absolutely no mastery of, I found myself in the situation of the writer who writes a few lines on his sheet of paper, then, annoyed, makes a dumpling of it before throwing it violently into the wastebasket. Since then, I’ve taken the time to find out more, and you’re reading the third (v3.2, in fact 😅) and definitive version of this article. Knowing this, I hope you’ll enjoy reading it all the more.

Throughout this article, we’ll be accompanied by Suzanne, who’s been kind enough to re-read it and add clarifications (or correct me when I’m talking bullshit nonsense 😅). So, how is Suzanne legitimate on this subject? Well, she works in finance in Paris (France). And more precisely, she’s an institutional saleswoman, meaning she sells financial products to professionals (large corporations, insurers, pension funds, etc.). So, it seems she has the perfect profile for this proofreading task. A huge thanks to her!

How to invest in stocks, bounds, funds, etc. profitably?

For most of us, the world of financial investment is pretty nebulous, and it attracts us just as much as it worries us. How many times have I thought, as I’ve watched the share prices of Apple, Tesla or Amazon soar to dizzying heights, that maybe it’s time to invest myself? Well, there’s a risk involved. And few people like risk. What’s more, deciding to invest when you know nothing about it is not encouraging at all. And that’s precisely the point of this article.

But it might be useful to clarify what we’re talking about here, especially for those for whom this notion remains rather abstract. Investing in financial products is a bit like putting your money into different baskets of opportunities. You can choose to put part of your money into companies by buying what are known as “shares”, and thus become a co-owner of the company, or to lend your money to governments or companies (what are known as “bonds”), which will return it to you with interest. The idea here is to choose carefully where and how to invest your money to ensure an optimum return.

But why invest at all? To answer this question, think of inflation — the tendency of prices to rise over time. Leaving your money under your mattress means seeing it lose value. Investing is therefore also a way of protecting your purchasing power. However, you have to do it intelligently to limit the risks. Let’s take a look at the basics.

Hiding your money under your mattress is the only investment where the more you sleep on it, the less it pays off (plus the bedbugs might take off with it 😁).

Investment objectives

Let’s start with the foundation of any successful investment: clearly defined objectives. Why do you want to invest? The answer varies from person to person. For some, it’s to prepare for the future, such as financing a child’s education or ensuring a comfortable retirement. For others, the objective may be to buy a house or create an emergency fund.

Your investment objectives determine your strategy. If you’re aiming for long-term growth, you may opt for riskier but potentially more profitable investments. Conversely, if your horizon is short-term, or if you’re simply looking to preserve your capital, safer options may be preferable.

In concrete terms, to define your investment objectives, you need to start by assessing your current financial situation. How much can you reasonably invest without compromising your financial security? Next, think about your aspirations and needs in the short, medium and long term. Do you want to create an emergency fund, finance a specific project in a few years’ time, build wealth for your retirement, or simply become rich?

Finally, it’s essential to review your goals regularly. Life is dynamic, and your priorities today may not be the same as those of tomorrow. Likewise, the market evolves. A constant alignment between your objectives and your investments is therefore vital if you are to stay on course towards your financial aspirations.

Risk profile

Understanding your risk profile is another element to consider before embarking on any investment. But what exactly is your risk profile? Simply put, your risk profile reflects your ability to withstand market ups and downs. It’s a bit like choosing a roller coaster: some prefer smooth, predictable rides, while others seek the thrill of steep descents and sharp turns. So, it’s not just a question of how much you can afford to lose, but also of how much market fluctuation or uncertainty you’re psychologically prepared to endure.

Determining your risk profile depends on several intrinsic factors. Your age, for a start: the younger you are, the more time you generally have to recover from potential financial setbacks, which could justify a higher risk profile. Your investment knowledge and experience also play a role: the more knowledgeable and experienced you are, the more comfortable you may be with risky investments.

Overall, there are three categories of risk profile:

• Conservative: Prefers security and stability, accepting lower returns for less risk.
• Moderate: Opting for a balance between risk and return on investment.
• Aggressive: willing to take significant risks for higher potential gains.

Identifying yours is essential to building an investment portfolio that suits you, and enables you to progress towards your financial goals with confidence and peace of mind.

Suzanne: For me, the risk profile is essentially linked to the investment period, i.e. how long I’m willing to leave my money invested, without needing to touch it. For my precautionary, short-term savings, I take no risk, I’m cautious. For my long-term savings, I put everything in equities because I know I won’t touch them for 20 years. So, I have several profiles of my own.

How much to invest?

This is a question often asked by new investors, but there is no single answer to it, as every investor has different needs and capabilities. This varies according to each individual case, and it’s generally advisable to start by investing an amount you can afford to lose, without compromising your essential financial obligations.

But how much you spend on your first investments depends on your personal financial situation, your investment objectives and your risk tolerance. The most sensible strategy, especially when you’re just starting out, is to begin with small investments and gradually increase them.

Is there a minimum amount to start investing?

Gone are the days when investors were wealthy, potbellied businessmen slamming millions into the stock market, all the while chewing on a fat cigar in the corner of their mouths. That was the 19th century! Today, thanks to the diversity of investment options and the democratization of access to financial markets, anyone can invest and start with a small amount. Many online trading platforms enable you to buy assets with relatively modest sums.

That said, it’s important to take into account any transaction or management fees that may apply, as they can have a significant impact on smaller investment amounts. I’ll talk more about this in the next chapter.

Suzanne: What we recommend to our customers is to invest on a regular or programmed basis, especially for people who don’t know their way around or who don’t have the time or inclination to follow market trends. We don’t necessarily mean gradually increasing, but above all being regular, so as to smooth out your entry points (you buy the same stock or fund every month, at different prices).

Various fees

Before we get to the heart of this article, there’s one last important point to make. When you invest, it’s crucial to understand the costs associated with your investments. These costs can take many forms, such as brokerage fees, transaction fees, management fees and others, and they vary according to the financial products and platforms you choose.

• Brokerage fees are charges levied by brokers for executing transactions on the financial markets.
• Transaction fees (or commission fees) are generally charged every time you buy or sell an asset (stock, bond or fund).
• Management fees are charged by fund managers to administer your investments.
• Some products may include performance fees, which compensate the manager if your investment exceeds a certain return threshold.

These fees may seem minimal at first glance, but they accumulate over time and can eat up a significant portion of your returns. That’s why it’s essential to compare them carefully before committing yourself. Online brokerage platforms offer a variety of fee structures, with some even offering no-fee transactions for specific products.

In short, a thorough understanding of fees enables you to make informed decisions and optimize your investment strategy to make it as profitable as possible. Remember: every dollar you save in fees is another dollar working for you in the marketplace.

Which financial products to invest in?

The field of investment is vast and diverse, but three main types of financial products stand out for their popularity and potential: stocks, bonds and funds. Each has its own advantages and disadvantages, risks and opportunities. Any investor who wants to navigate the sometimes stormy waters of the financial markets wisely, but also build a robust portfolio tailored to his or her personal goals, should be familiar with these different concepts. Let’s take a look.

Shares (or Stocks)

aWhat is a share?

A share (or stock, or equity) is an ownership interest in a company. When you buy a share, you become a shareholder, which means you own a fraction of the company. This entitles you to a share in the company’s profits, often distributed in the form of dividends, and allows you to participate in certain decisions through voting rights at general meetings.

bHow accessible are the shares?

Although investing in shares offers the potential for high returns, it requires a thorough understanding of the market (as well as a tolerance for risk, as I’ve already explained). This makes shares less accessible to neophytes, who must therefore spend time learning the necessary basics beforehand, and then study each investment in detail.

c. What are the risks?

Shares are renowned for their high return potential, but they also carry risks. The value of a share can fluctuate considerably, depending on company performance and market conditions. This volatility can be influenced by economic or political factors, or even by the company’s own internal decisions. It is therefore essential to understand these risks and not to invest more than you can afford to lose.

Bonds

aWhat is a bond?

A bond is a debt issued by an entity (company, government or municipality) to finance its projects or activities. By purchasing a bond, you are lending money to the issuer, who in return promises to repay the principal amount on a specific maturity date, while paying you interest at regular intervals. It’s a form of investment that generally offers less risk than equities, making it a popular choice for investors looking to preserve their capital while generating a regular income.

bHow accessible are the obligations?

The main drawback here is the minimum investment amount. This is usually very high, limiting access to bonds for small or micro investors like you and me. This barrier contrasts with some exchange-traded equities, where the initial investment can be much more modest.

cWhat are the risks of bonds?

Despite their reputation for security, bonds can carry certain risks. Credit risk, in particular, concerns the issuer’s ability to meet its financial obligations. Note also that corporate bonds are generally riskier than government bonds, but offer higher yields.

Interest rate risk should also be considered: if interest rates rise, the value of existing bonds tends mechanically to fall, as new bonds may be issued at higher rates.

Other financial products

The world of financial investment abounds in a multitude of other products, each offering distinct features and opportunities. These include:

• Options: Financial derivatives that give the buyer the right, but not the obligation, to buy (call option) or sell (put option) an underlying asset at a specified price (strike price) within a certain period or on a specific date.
• Derivatives: Financial instruments whose value depends on the performance of other assets, known as underlying assets. They are often used for risk-hedging or speculative purposes, enabling investors to bet on future movements in assets without having to own them directly. In general, these products are used to hedge against risk or to diversify an existing portfolio.
• Alternative investment products: This category encompasses unconventional assets, such as commodities, art or private placements. They can offer additional diversification and protection against inflation.
• Etc.

These other products may offer advanced investment strategies, but they often require in-depth knowledge of financial markets and present varying levels of risk.

I guess that if you’re reading this article, you’re probably one of those curious neophytes eager to embark on this adventure, so I think it’s pointless to burden you further with information that won’t be of immediate use to you, and will only add to your confusion.

But if shares are so complex and risky, and bonds require such a large initial investment, what can you do? As you can imagine, I’m asking this question because I have the answer, and it can be summed up in just 2 words: investment funds.

How do investment funds work?

Investment funds

An investment fund, also known as a mutual fund, is a kind of basket that pools the money of several people for investment in a variety of assets, including stocks, bonds and so on. Investors own one or more shares in this collective investment. This method enables investors, even with a small starting amount, to access a wide range of funds.

The money invested in these funds is managed by financial experts known as “fund managers”. They decide which assets to buy or sell, and when to do so, always with a view to obtaining the best possible return and thus increasing the value of the fund for investors. Their work is based on a detailed analysis of the market to identify the best opportunities, while respecting the chosen strategy and level of risk.

The other advantage here, and not the least, lies in the ability to diversify investments. It’s this diversification that reduces risk by spreading the investment over different assets, thus reducing the risk of major losses when the price of one of them collapses.

Last but not least, entrusting the management of these investments to professionals frees investors from daily market monitoring and complex investment decisions. If you don’t have the time or inclination to get involved in the active management of your portfolio, investment funds are an ideal solution.

How to invest in investment funds?

Investing in investment funds is accessible to everyone, and can be done in two main ways: either via a trading platform, or through your bank or an independent broker. Each of these options has its own specificities, but both aim to facilitate your access to the financial market.

1Through your bank or an independent advisor

In this process, investors work with a financial professional to select products suited to their objectives and risk tolerance. The advisor analyzes the investor’s financial needs, suggests a range of appropriate assets and recommends specific funds based on these parameters. The advisor then purchases and manages the funds on behalf of the investor, regularly monitoring their performance and making adjustments if necessary to reflect changing circumstances or pre-defined objectives.

This business model offers investors access to professional expertise and personalized advice, which can be particularly advantageous for those unfamiliar with financial markets or who prefer to delegate the management of their investments to experts. However, it should be noted that this service may be subject to advisory and management fees, which can have an impact on potential investment returns.

Financial advisors from financial institutions vs. independent advisors

There are two main types of financial advisors: those affiliated with an institution and those working on their own account. There are some notable differences between the two, and these lie mainly in their professional status:

• An institution-affiliated financial advisor is an employee of a financial institution, such as a bank, insurance company or wealth management firm, and provides financial advisory services to that institution’s customers. These advisors often have privileged access to detailed market analyses and sophisticated financial management tools, enabling them to offer advice based on up-to-date, relevant data.
• An independent financial advisor, on the other hand, is a financial professional who works autonomously, without being affiliated with a specific financial institution. They also have access to a wide range of products and financial service providers, as well as reliable data and high-performance tools, enabling them to offer personalized, expert advice.

Both are bound by a fiduciary duty to their customers. This means that they are legally obliged to act in their clients’ best interests, providing honest advice and putting their clients’ needs before their own. The choice between the two will depend on your personal preferences, specific objectives and needs. And whatever you decide, this option offers you the opportunity to be accompanied by truly qualified professionals in the creation of a tailor-made wealth management strategy.

2Via a trading platform

Online trading platforms, or brokerage platforms, have radically transformed the world of investing, by simplifying access to the financial markets. These offer a user-friendly interface where you can open an account, transfer funds and start investing with just a few clicks. The main advantage is convenience and speed, enabling direct access to a wide range of funds, often at lower transaction costs.

Suzanne: fund management fees are the same whether they’re sold on a trading platform, in a bank or via independent management advisors. It’s the other fees that differ.

The range of investment opportunities is generally very broad, including equities, stock market indices, currencies, commodities and even cryptocurrencies. However, it’s essential to fully understand how some of these financial products work before you start trading.

To get started, simply choose a platform, create an account, deposit funds, and select the investment fund(s) that match your goals and risk tolerance. Most platforms also offer tools and resources to help you make informed decisions.

Here are some of the “Best Online Brokers and Stock Trading Platforms”, according to TIME magazine’s personal finance branch:

• JPMorgan Chase Bank (J.P. Morgan Self Directed Investing): Self-Directed Investing by J.P. Morgan is a dependable option for beginners who wish to gain experience purchasing and selling bonds, equities, ETFs, options, and mutual funds. There are no fees associated with trading stocks, ETFs, or mutual funds, and contract options cost $0.65.

  A user-friendly trading platform and an application that seamlessly integrates with other Chase products (including bank accounts and credit cards) are available. J.P. Morgan Self-Directed Investing may therefore be particularly appealing to current Chase clients.

  Account minimum: $0 – Available from: the US and United Kingdom

• Robinhood Gold: Robinhood Gold is an option to consider if you are a frequent visitor of Robinhood and wish to advance your investing. Gain access to a suite of premium tools and features, including lower margin rates, Level II market data from Nasdaq, and professional research from Morningstar, for no commissions (other fees may apply).

  A Gold subscription fee will be required following a 30-day free trial. Terms apply. Existing clients earn an interest rate of 5.25% on uninvested currency, or 1.5% in the absence of gold. No cap. Withdraw anytime. A rate that is comparable to that of some of the highest-yielding savings accounts available. Whether or not you have a Gold subscription, Robinhood offers commission-free investing and trading.

  Account minimum: $0 – Available from: the US, UK, and Europe

• TradeStation: TradeStation is a self-clearing broker dealer and futures commission merchant (FCM) that offers hundreds of tools for testing, analysis, and charting in addition to many sophisticated order placement features. These tools are meant to help traders who are self-directed, active investors, and those who are ready to move forward in their investing careers develop their discipline and confidence.

  TradeStation’s technology has evolved over time and is now available on desktop, online, mobile, and third-party trading analysis apps that link to TradeStation’s brokerage environment through its cutting-edge application programming interface (API) technologies.

  Account minimum: $0 – Available from: USA

• Ally Invest: Ally Invest is an online brokerage platform that provides a wide range of investment options, from stocks and ETFs to options and mutual funds, catering to both self-directed investors and those seeking managed portfolios. Known for its low fees and no account minimums, it makes investing accessible to beginners while still offering advanced tools for experienced traders.

  Additionally, as a part of Ally Financial, it offers the convenience of integrating banking and investment services, making it easier for users to manage their financial activities in one place.

  Account minimum: $0 – Available from: USA

• Fidelity Investments: On a number of “best of” lists, Fidelity Investments has peaked. It provides $0.0 trades in stocks and ETFs, $0.65 trades in contracts of options, $0 trades in Fidelity mutual funds, and approximately 3,300 NTF mutual funds. The web platform is likely to provide novices and buy-and-hold investors with every instrument they require, such as screeners, educational materials, and internal and external research.

  Traders with greater expertise and frequency can utilize the Active Trader Pro interface from Fidelity, which features a customizable layout and additional features.

  Account minimum: $0 – Available from: USA, Europe, and other countries

• E*TRADE: As a subsidiary of Morgan Stanley, E*TRADE was the first U.S. broker to offer online trading to retail investors. It provides $0.0 trades in stocks and ETFs, $0.65 trades in options, $1.50 trades in futures contracts, and over 6,500 NTF mutual funds. A variety of trading platforms are provided by E*TRADE to accommodate investors of all skill levels.

  The E*TRADE Web platform is designed to cater to novice traders, whereas the Power E*TRADE platform is more suitable for experienced traders. While Power E*TRADE Mobile is intended for more sophisticated trading, the E*TRADE Mobile app is feature-rich and intuitive, earning it a high rating.

  Account minimum: $0 – Available from: USA

• TD Ameritrade: TD Ameritrade’s superior educational and research resources make it a well-liked option among young investors. It provides transactions of $0.0 for stocks and ETFs, $0.65 for options contracts, $2.25 for futures contracts, and over 3,600 NTF mutual funds.

  Every year, TD Ameritrade organizes a multitude of in-person events, virtual seminars, and webinars to supplement its extensive content library. These events cover a wide range of topics, including fundamentals of stock investing and advanced strategies for options.

  Account minimum: $0 – Available from: USA, China, Hong Kong, Malaysia, Singapore, Thailand, Taiwan, and Canada (through TD Direct Investing)

• Charles Schwab: In 1974, Charles Schwab established the discount brokerage industry by providing expedient and effective order executions alongside competitive pricing. The organization presently holds the distinction of being the preeminent publicly traded investment services firm in the United States, managing an estimated $7.65 trillion in client assets.

  It provides transactions of $0 in stocks and ETFs, $0.65 in options contracts, $2.25 in futures contracts, and $0 in OneSource mutual funds. You have access to more than 2,000 commission-free ETFs from third parties, spanning a wide variety of asset classes, in addition to Schwab ETFs; its ETF screeners are the finest in the industry.

  Account minimum: $0 – Available from: USA, UK, and some EU countries

Each of these platforms has its own advantages and specificities, ranging from ease of use for beginners to advanced features for more experienced investors. Note that I’ve only found one platform for Canada, certainly because of the strict local regulations. But if you know of any, please let me know in the comments.

Robinhood Gold offers a simple, intuitive interface for all screen types.

What’s the right choice between a trading platform and a financial advisor?

As is often the case, there is no universal answer to this question. Each of these two options has its own advantages and disadvantages, and the choice will depend on your personal preferences, your comfort level with managing your investments independently, and your financial knowledge.

If you prefer a more autonomous approach and are comfortable with investment decisions, a trading platform can offer great flexibility and potentially lower costs. However, it also requires in-depth research and a minimum understanding of the financial markets to make the right decisions.

On the other hand, using a financial advisor can offer you personalized support, sound advice from financial experts, and professional management of your portfolio. A perfect solution, then, if you prefer to delegate the management of your investments to people more qualified than you.

What are the best investments?

Determining the best investment is a bit like trying to aim at a moving target. Financial markets are dynamic, and the “best” investments can change rapidly. For example, technology stocks used to be the star performers for investors, with companies like Nokia, BlackBerry and Yahoo dominating the market. But with the arrival of new challengers and their technical advances, their share prices have fallen dramatically.

On the other hand, traditionally less attractive sectors, such as renewable energies, have experienced a meteoric rise due to changing consumer preferences and government policies.

What is clear is that market trends can evolve rapidly, often influenced by external factors such as geopolitical events, technological innovations or regulatory changes. Take the real estate sector, for example. For a long time, it was considered a safe and stable investment. However, the 2008 financial crisis showed that no sector is totally immune to shocks. Sub-prime mortgages and complex derivatives led to a dramatic collapse in global markets.

So, if you’ve decided to manage your investments yourself, the best thing to do is to stay informed and adapt your strategy as market conditions change. Following the trade press, consulting financial blogs, using investment apps and even talking to financial advisors are all excellent ways of staying up to date.

Remember that investing is not an exact science. A balanced approach that takes into account your personal situation and long-term objectives, as well as a healthy dose of vigilance and reactivity, are essential to optimize your chances of success.

Tips and tricks

Here are a few tips and tricks that should help you get off to a good start in the world of financial investments.

• Educate yourself: I insist on this point, because financial investment is a complex and constantly evolving field. Take the time to educate yourself on the different products, financial terms and investment strategies. It’s your best guarantee of financial success!
• Start early and invest regularly: The earlier you start, the more you benefit from compound interest, the mechanism by which interest earned on an investment is reinvested to generate interest in turn.
• Pay attention to fees: Management and transaction fees can reduce your returns. Look for low-cost investment options and find out about the fees associated with each product you want to invest in.
• Watch, but don’t overreact: Keep an eye on your investments, but avoid overreacting to normal market fluctuations. Investing is a long-term process, never forget that. Above all, avoid hasty decisions based on emotion or market rumors.
• Consult a professional if necessary: If you’re feeling overwhelmed or unsure, don’t hesitate to seek the advice of a professional financial advisor (available from your bank, for example). They can provide personalized advice tailored to your situation.
• Be careful with leverage: Investing with leverage (using borrowed money to increase potential returns) can amplify your gains, but also your losses (you can sometimes lose more than you put in). Make sure you fully understand the risks before using derivatives or loans to invest in equities.
• Diversify your investments: Don’t put all your eggs in one basket. Diversification can help reduce risk.

Glossary

Before moving on to the conclusion, here’s a glossary of some of the more technical terms used in this article, with a brief explanation of their meaning.

• ETFs: These are Exchange-Traded Funds. They are designed to track the performance of an underlying index, a specific sector or a basket of assets. Investors can buy and sell ETF units throughout the trading day, at prices that fluctuate according to market supply and demand.
• A broker: a person or entity that acts as an intermediary between buyers and sellers on the financial markets (stock exchange, Forex, commodities market, etc.). Brokers can provide a variety of services, including order execution, investment research, financial advice and more. They may work for brokerage firms, banks, financial institutions or act as independent brokers.
• Forex: Global market where convertible currencies are traded against each other. It is the world’s largest and most liquid financial market, with daily transactions totaling billions of dollars. Fluctuations in exchange rates are influenced by a variety of economic, political and geopolitical factors, and forex investors seek to profit from these movements by speculating on changes in exchange rates.
• Securities: The term “securities” is often used in the world of finance to refer generically to different forms of assets, including stocks and bonds.
• An asset: An asset is a valuable resource that can earn you money. For example, stocks, bonds and real estate are assets.
• ROI: Return on investment, i.e. the profit obtained on a sum of money invested.
• Portfolio: Collection of investments held by an individual or institution. A well-diversified portfolio can include stocks, bonds, funds and other financial assets.
• Market: This term refers to the stock market where shares and other financial instruments are traded. It can also refer to the place or context in which purchases and sales of financial assets take place.
• Dividends: Regular payments made by a company to its shareholders, generally out of profits. They represent a share of the profit returned to investors.
• Leverage: Using borrowed capital to increase the potential return on an investment. While it can amplify gains, leverage also increases risk.
• Stop-loss orders: Instructions given to a brokerage platform to sell an asset when its price reaches a certain threshold, in order to limit potential losses.
• Cryptocurrency: This is virtual money, like Bitcoin. Read this article to find out more.
• Index or Indices: A tool for measuring the performance of a particular financial market or sector. They are created by taking the share or asset prices of several companies or financial entities and combining them. These indices help to assess the performance of the market as a whole, compare investment returns and track economic trends
• Underlying indices: Foundations on which ETFs and similar financial products are based. They represent the specific markets or sectors that these funds try to track or replicate. For example, if an ETF tracks the S&P 500 index, then the S&P 500 is its underlying index. Movements in this underlying index are very important, as they greatly influence the ETF’s performance. In other words, the underlying index is the benchmark that the ETF is trying to copy or outperform.

Conclusion

As you’ll have gathered, the aim of this article was not to turn you into a financial investment expert, but rather to open the doors to a world that frightens as much as it fascinates. For lay people, investing in financial products may seem complex, but with a little time and effort to learn the basics, it’s perfectly possible to get started with peace of mind, make informed decisions and minimize risk.

Today, of course, there are ways to invest with little or no hassle. Automated solutions and wealth management services can manage your investments for you. However, the more you learn about this subject, the more precise control you’ll have over your investments.

In short, investing in funds can be a good option for beginners, as equities can be complex and bonds are often inaccessible due to their high minimum amounts. For those who have neither the time nor the inclination to become actively involved in managing their portfolio, using an institutional or independent financial advisor may be the best solution. On the other hand, using a trading platform offers greater control, but requires more time and knowledge to invest effectively in the various markets.

I think you now have all the keys you need to get off to a sound start. So, I’ll end with just a few final words of advice: never invest the money you might need, stay alert to market fluctuations and never stop learning. Remember that investing is a marathon, not a sprint. Take time to reflect on your decisions, and be aware that every investment has its own risks and opportunities.

Finally, there’s one aspect that I haven’t mentioned in this article, but which is nonetheless fundamental, especially in this day and age, and that’s the environmental and social impact of financial investments. This is the subject I’m going to address now to conclude this article, and I strongly urge you to read it carefully.