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submitted 3 months ago by scytale@lemm.ee to c/personalfinance@lemmy.ml

I've been on an HSA+HDHP for a couple of years now and only realized recently the interest earned from investing HSA money is also tax free, so I want to start investing a part of my savings and see how it goes. I have 2 options, Betterment or Mutual Funds. I figured I'd try the latter to avoid fees, but I'm not sure which funds to choose. My HSA currently provides 30 fund options.

I see people mentioning Vanguard a lot so I spread out my initial investment into 25% chunks across 4 different Vanguard funds. How did I choose them? Well I literally just looked at the performance graphs and selected the ones that historically went up steadily without major dips. As a total noob, how can I improve my choices? Is there a simple way to decide without having to dive deep into the stock market?

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[-] n0m4n@lemmy.ml 3 points 3 months ago

I joined https://www.bogleheads.org/ which was also when I started learning about mutual funds

Bogle started the first index fund family (Vanguard), so there is an index fund bias with many there, but the forum has very knowledgeable people. (Full disclosure, I am busy, and use indexing myself, but not in Vanguard.)

You have managed to hit the best all-around choices on your first try.

The large difference is to learn to have the discipline to ride out the ups and downs of investing. In a recession, it is a gut punch to see your hard-earned investments drop. The losing segment says the whole market is rigged, screw this and lock in their losses by selling. When the market improves, highs are being clocked, these same are likely to forget their previous folly and buy in again. It is investing that is controlled by emotions, and is a buy high, sell low outcome. Mastering your emotions in investing is the key to investing. Many people give 1/4th of their money to brokers so that they will be reminded of the previous paragraph, when they need it most.

We are financially independent thanks to indexing, and using emotions in a constructive way. We also have been through a few ups and downturns, making money in each cycle, by riding it out, and asset allocation.

Follow your plan and ride things out, and you will likely be a multi-millionaire. It is not overnight, though.

this post was submitted on 05 Sep 2024
17 points (90.5% liked)

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