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bolido_sentimental  1yr ago (text post)   4136 thread views

Small-Scale Question Sunday for December 25, 2022

Merry Christmas, everyone!

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Day trading is a bad idea. The overwhelming majority of investors lose money.

How you invest the money depends on when you will need it. If you don't need the money in the next ten years or more, you a better off putting it in an index fund. Vanguard does the ones with the lowest fees.

Index funds can also be 'income' rather than 'accumulation'. This means that dividends are paid out as cash target than being reinvested in the shares that make up the fund. If you intend to spend the income from your savings (rather than just getting the pot) then this might be a better idea.

Index funds can also be 'income' rather than 'accumulation'.

How does this work if the investment is losing money? Are you then expected to put up more money to compensate for the loss?

The price of the shares can go up or down, which would bring the value of the fund up or down. But every quarter the dividend payments from the shares would be paid out to the fund holders. This is usually around 2% of the value of the fund, but obviously can be lower in a poor business environment.

An accumulation fund would just take these dividends and buy more shares with them.

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