Back to the Basics: A Starter Guide for New Investors

What It Covers

Andrew Sather and Dave Ahern explain foundational steps for new investors, covering why to invest, account setup, investment vehicle selection, fee considerations, and the importance of starting immediately regardless of amount.

Key Questions Answered

• •Time horizon priority: Stock markets show extreme short-term volatility but consistently trend upward over decades, delivering 8.5-10% annual returns with dividends. Investors must commit to leaving money invested long enough to overcome temporary downturns and capture compound growth.
• •Fee impact on wealth: Management fees of 1-2% annually compound negatively over decades, potentially costing hundreds of thousands in lost returns. Index funds with minimal fees outperform most actively managed mutual funds while preserving more capital for compounding.
• •Employer match advantage: Contributing to 401k plans with employer matching provides immediate 100% returns on matched contributions. This represents the single highest guaranteed return available to investors and should be maximized before exploring other investment vehicles.
• •Starting threshold eliminated: Modern brokerage platforms allow investing with as little as one dollar through fractional shares and automated recurring purchases. Monthly contributions of $100-200, consistently invested over years, accumulate substantial wealth through compound returns without requiring large initial capital.