Investment Advice for a 20 year old

Hey Chelsea,

First, here’s a couple of resources I’ve written which hopefully steers you in the right direction and gives you some tips to avoid.

Newbie investor checklist: https://pearler.com/explore/learn/blog/invest...
Mistakes to avoid: https://pearler.com/explore/learn/blog/invest...

In general, I would start with something simple and diversified. Have a look at the most popular ETFs on the pearler platform, which you can find here and see if any appeal to you after deciding on your strategy: https://pearler.com/explore/invest/shares

Start small, invest on a regular basic, and learn as you go. All the best :)

Starting your investment journey with ETFs (Exchange Traded Funds) is a popular choice due to their inherent diversification, cost-effectiveness, and ease of trading. Here are some general tips for investing in ETFs smartly and safely, especially if you’re starting with an initial investment of $10,000:

1. Diversification: One of the key advantages of ETFs is that they offer instant diversification across a whole index. This can help mitigate risk as your investment is spread across potentially hundreds of stocks. For example, an ETF tracking the ASX 200 will give you exposure to 200 different companies in various sectors.

2. Consider Your Risk Tolerance and Investment Horizon: Before investing, assess your risk tolerance and how long you plan to invest. If you have a high risk tolerance and a long-term horizon, you might consider equity ETFs which generally offer higher returns but come with higher volatility. Conversely, if you prefer lower risk, consider bond ETFs or mixed-asset ETFs.

3. Regular Investments: Since you have $10,000 to start, you could consider using a strategy like dollar-cost averaging (DCA). This involves investing a fixed amount regularly regardless of the ETF’s price. This strategy can reduce the impact of volatility by spreading the purchase price over time. For instance, investing $1,000 every month for 10 months.

4. Reinvest Dividends: Many ETFs offer dividend reinvestment plans (DRIPs) which automatically reinvest dividends to purchase additional shares of the ETF. This can compound your returns over time, turning small gains into significant growth through the power of compounding.

5. Low Fees: Pay attention to the expense ratio of ETFs. This is the annual fee that covers the operating expenses of the ETF. A lower expense ratio can significantly affect your investment returns over time, especially when investing a substantial amo

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