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Help someone with zero financial education start from nothing (thelemmy.club)
submitted 1 day ago* by to c/personalfinance@lemmy.ml
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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?)

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[–] 0 points 1 day ago

I will note that another way to look at it is by owning full shares of large companies you get to vote as a shareholder on how that company is run because you literally own a small slice of it. Sure, the handful of shares most retail investors own don’t make a difference compared to the shares owned by investment banks and ETFs, but if you want to put your money to work in more ways than just making more money, owning stocks is one way to do that at a principled level. It is also a way to buy into companies you do agree with, and again vote to keep them going in the direction you want them to go in. That said, a somewhat lower-risk way to do this is to look for socially aligned ETFs. There are many around that invest into companies with solid climate goals/records, good stances on human rights, investment into employee wellbeing, and tons more depending on what you care about. They aren’t likely to have the same returns as an index fund that tracks the S&P or NASDAQ, but it’s a more socially responsible way to invest with non-monetary returns.

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