Originally posted August 8, 2018. Last Updated March 17, 2019

How to Invest Your First $10,000

Many advisers will tell you that you should hold the majority of your funds in a diversified index fund like a S&P 500 tracking fund (Vanguard index funds are good for this, particularly the Vanguard Total Market Index VTI or Vanguard’s S&P 500 tracking fund – VOO).

Protection Through Diversification

This is good advice. Any investor – new or experienced – can make mistakes, picking the wrong individual stock that exposes a portfolio to significant losses with no way to make up those losses over time. By holding a large percentage of a portfolio in index funds or Exchange Traded Funds (ETFs), investors can take advantage of a large part of the upside with less downside risk.

Jim Cramer of CNBC’s Mad Money fame (love him or hate him, he knows what he’s talking about) recommends putting your first $10,000 into an index fund before you even think about trading individual stock names.

Although Get Irked manages a significant percentage of our portfolio and our performance far exceeds gains in the S&P 500, diversification protects the majority of our portfolio using Vanguard Exchange Traded Funds (ETFs) and Index Funds  in case we screw up royally managing our own funds.

Learn About Index Funds & ETFs

There are many investing products available so investors should meet with a financial adviser to discuss their goals and risk profiles.

To learn more about ETFs and Index Funds, check out Get Irked’s feature on the subject by clicking here.