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The general idea is that you just want to have diverse companies whose profits and losses are uncorrelated. Since the market in general goes up you won't be hur
by neaden 10y ago
The general idea is that you just want to have diverse companies whose profits and losses are uncorrelated. Since the market in general goes up you won't be hurt if say, Apple takes a nosedive because your small investment in Boeing makes up for it. A common approach is an S&P 500 index fund which invests in the 500 largest U.S Companies in the stock market. I wouldn't actually recommend only investing in index funds though, personally my retirement investment is a mixture of large capital index funds, small capital index funds, foreign index funds, and U.S Bonds. Talk to a financial planner (preferably a Certified Financial Planner IMO but I'm biased since I have a relative who is one) and make sure they have a fiduciary duty to you.