cross-posted from: https://lemmy.blahaj.zone/post/46894980
Hi, I am a young Italian (I guess the "poste Italiane" gives it away uh) and I plan to make my fist small experiments to understand how buying stoks and ETFs works.
I tried to look around what all those acronyms and big words mean but usually the definition and explanations I found use other acronyms and big words and end up being mentally exhausting to follow.
As far as I understand An ETF is a group of companies that share a market and by shoving money in there (investing in the found is the right phrase I guess)
you either buy stocks
(which are just money you give the company to spend and after the profit is made it should give it back with a certain interest I think, right? How much interest and how often is a great mystery I have yet to solve)
or fractions of stocks
(what is the point of a stock being a certain price then???? If i can just buy a small piece of it???)
from one of the companies in the found
(randomly I guess, or according to a broker whims maybe idk)and when the dividends are paid you can either get some money back or reinvested in the found.
Those ETFs are apparently more secure because they spread your money around multiple companies within multiple fields and I feel like I should invest more in those then in singular companies, is that right?
Also I'm planning to start with 50€ each month but if I feel comfortable enough I plan to rise the investment to maybe 300€ monthly, but I often see people saying that for those amounts of money (which are a fuckton to me) you should just dump in a single ETF and forget about it for like 10 years, but it feels so wrong to put so much money into something with risks attached to it and then ignoring it, is there something else I'm not getting? (As opposed to all the other things I'm understanding perfectly, right?)
Try to define what your goals are. Is it short term gains? You'll need to be much more involved (and I have zero tips for that). For medium to long term savings, dumping in a well spread ETF is a really solid idea. It has risks, sure. But there are no riskless instruments. Even a normal savings account is only secured up to a specific sum (100k€ most often) and your bank could go bust.
I recently pivoted from MSCI world to a all world imi etf, so instead of ~70% us stocks I "only" have 60% in my etf. If you leave your money in for more than 15 years, you will sit out crashes like 2008, corona, and so on and make a profit. Don't buy any with more than 0.2% fees. Yes, of half the worlds economy crashes for good my etf money will be gone. But, what value would even cash have in such a scenario? I'd rekon the world will be gone full mad max if it ever came to that.