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?
Thank you so much for the very detailed information! This is honestly the best direct advice I’ve gotten that is understandable for someone like me who knows nothing about it. I will use this info as a starting point and re-allocate my funds accordingly.
No worries!
One thing I didn’t mention is value vs growth, and you’ll see that a lot. Basically, “value” means companies that are undervalued by the market, and “growth” means companies that the market believes will continue to grow (i.e. higher dividends, established brands, etc). Funds that provide one over the other are betting that one will outperform the other, and people are on either side. I think that if picking winners was that easy, everyone would do it, so I instead just try to build a balance.
But anyway, there are a few resources I really like that can help if you want to dig further:
Have a great day, and don’t hesitate to make another post here if you have questions.