Your First Investment

You have a brokerage account with money in it. That money is sitting in a money market fund, earning roughly the same as a savings account. It’s not invested yet. You opened the account, deposited cash, and now you’re staring at a search bar wondering what to type into it.

This is where most people stall. There are over 10,000 mutual funds and ETFs in the United States. Surely picking the right one requires research, analysis, maybe a spreadsheet or two.

It doesn’t. You need one fund. Five minutes.

The One Fund You Need

A total stock market index fund holds every publicly traded company in the United States. Not a selection. Not someone’s best picks. All of them. When you buy one share, you own a tiny piece of Apple, a tiny piece of your local bank, and a tiny piece of every company in between. Roughly 3,600 companies in a single purchase.

Think of it like a meal kit versus grocery shopping. You could spend hours wandering the aisles, picking individual ingredients, comparing brands, second-guessing whether you need cilantro or parsley. Or you could grab one box that has everything in it, already portioned, already selected by someone who’s done this a thousand times. You’ll actually eat dinner tonight instead of standing in the spice aisle for forty-five minutes.

An index fund is the meal kit. One purchase, complete portfolio, no decisions required.

Here are the specific funds, depending on your broker:

Broker	Fund	Type	Expense Ratio
Fidelity	FSKAX	Mutual Fund	0.015%
Fidelity	VTI	ETF	0.03%
Schwab	SWTSX	Mutual Fund	0.03%
Vanguard	VTI	ETF	0.03%
Vanguard	VTSAX	Mutual Fund	0.04%

An ETF (exchange-traded fund) trades like a stock throughout the day. A mutual fund trades once per day at market close. For a beginner buying and holding, the difference is meaningless. If you’re at Fidelity, FSKAX is the simplest path — it’s a mutual fund, so you can invest exact dollar amounts and set up automatic purchases without thinking about share prices.

The expense ratio is what the fund charges you per year, expressed as a percentage of your investment. FSKAX charges 0.015%, which means for every $10,000 you invest, you pay $1.50 per year. Not $1.50 per month. Per year. Compare that to an actively managed fund charging 1%, which would cost you $100 per year on the same amount. Over 30 years, that difference compounds into tens of thousands of dollars. We covered this math in Why Invest at All.

“But what about the S&P 500?” It’s also fine. An S&P 500 index fund holds the 500 largest U.S. companies instead of the full market. The historical returns are nearly identical. A total market fund gives you slightly more diversification by including smaller companies, but the honest answer is that either one will serve you well for decades. Don’t let the choice between them become another reason to delay. Pick one. Move on.

How to Place the Order

Log in to your brokerage account. Find the search bar, trade button, or “Buy” option. Type in the ticker symbol of your fund. For this example, we’ll use VTI with $500.

Every broker’s interface looks a little different, but the steps are the same everywhere.

Step 1: Search for the fund. Type “VTI” in the search bar. Click on it.

Step 2: Choose the order type. Select market order. A market order means “buy at whatever the current price is.” For a massive, heavily traded fund like VTI, the current price is always fair. You don’t need limit orders, stop orders, or anything else. Market order. Done.

Step 3: Enter the amount. You have two options here. You can enter a dollar amount ($500) or a number of shares. If VTI is trading at $250 per share, $500 gets you 2 shares. Most major brokers now support fractional shares, which means you can invest the full $500 even if it doesn’t divide evenly into whole shares. Say VTI is trading at $234.50. Your $500 buys you 2.13 shares. Every dollar goes to work immediately instead of sitting on the sideline as leftover cash.

Step 4: Review and submit. The broker will show you a summary: what you’re buying, how many shares, the estimated cost. Click confirm.

That’s it. You own a piece of every publicly traded company in America. The whole thing took less time than ordering coffee.

What you did	What it means
Bought VTI (or FSKAX, SWTSX, VTSAX)	You own ~3,600 U.S. companies
Paid an expense ratio of ~0.03%	You’ll pay about $0.15 per year on $500
Used a market order	You paid the current fair price
Invested $500	Your money is now in the market

If you’re using a mutual fund like FSKAX instead of an ETF, the process is even simpler. Mutual funds always let you enter a dollar amount directly. You type “$500,” and the fund figures out how many shares that buys at the end of the trading day. No fractional share math required. Mutual funds also make automatic recurring purchases easier to set up at most brokers, which is a real advantage since you’re going to automate this anyway.

Your broker will ask about dividend reinvestment. Say yes. When your fund pays dividends (a small cash distribution, usually quarterly), you want that money automatically used to buy more shares instead of sitting as cash. It’s a single checkbox, and it means your investment compounds without you lifting a finger.

What About Timing?

“Should I wait for a dip?” No.

This question has probably cost more people more money than any fee or bad fund choice. The logic feels sound: if the market drops 10% next month, you’ll wish you’d waited. But it might rise 10%, and you’ll have missed it. You can’t know. Nobody can. Not hedge fund managers, not economists, not the guy on cable news who sounds really confident.

A Vanguard study looked at what happens when you invest a lump sum immediately versus spreading it out over time. In about two-thirds of historical periods, investing everything at once beat waiting. The reason is simple: the market goes up more often than it goes down. Every day you wait for a better price, you’re statistically more likely to pay a higher one.

Time in the market beats timing the market.

If investing everything at once genuinely makes you anxious, split it up. Invest $100 per week for five weeks instead of $500 all at once. This is called dollar cost averaging, and while it’s slightly less optimal on average, it’s far better than doing nothing because you’re waiting for the perfect entry point. The perfect entry point doesn’t exist.

The Hardest Part

The mechanics of investing are trivially easy. Search, click, confirm. A child could do it.

The hard part is what happens after.

At some point, the market will drop. Not a gentle 2-3% dip. A real drop. 20%. Maybe 30%. Your $500 will temporarily become $350. Your $10,000 will become $7,000. Every financial headline will scream that the sky is falling. Your coworker will tell you he sold everything and moved to cash. Your stomach will tell you to do the same.

Don’t.

Every major market crash in history has been followed by a recovery to new highs. The 2008 financial crisis cut the market in half. Within five years it had fully recovered and then doubled. COVID crashed the market 34% in March 2020. By August it was back. The people who sold at the bottom locked in devastating losses. The people who did nothing, or kept buying, came out ahead.

Your temperament matters more than your IQ. Warren Buffett has said this repeatedly, and the data backs him up. The investors who earn the best long-term returns aren’t the smartest. They’re the ones who don’t panic.

Dalbar, a financial research firm, tracks this. Their finding is consistent: the average equity fund investor earns significantly less than the funds they invest in. Not because the funds are bad. Because the investors buy after prices rise and sell after prices fall. The fund returns 10%. The investor earns 6%. The gap is entirely self-inflicted.

You avoid this by making the decision once and removing yourself from the equation. Automate your investments. Don’t watch financial news. Don’t check your balance during a downturn.

We talked about this in Why Invest at All: the biggest advantage individual investors have over professionals is patience. The freedom to do nothing when everything feels like it’s falling apart. Don’t give that advantage away the first time the market tests you.

What Happens Next

Set up automatic investments. Every broker lets you schedule recurring purchases: $100 every two weeks, $500 on the first of the month, whatever fits your budget. Automate it so you never have to remember, never have to decide, never have to talk yourself into it during a scary month.

Then stop checking. Seriously. Uninstall the app if you have to. Checking your portfolio daily doesn’t make it grow faster. It just gives your brain more opportunities to do something stupid.

You’ve now completed the entire getting-started sequence. You know why investing beats saving. You have a brokerage account. You own your first index fund. The foundation is built.

The most important thing? You’ve already done it. The money is invested. Compounding has started. Go live your life.