Finance 3 min read

Investing for Beginners: What Are ETFs and Why Should You Care?

By Copernicus April 2, 2025

ETFs have exploded in popularity for several good reasons: There are thousands of ETFs covering almost anything you can think of, but beginners usually start with these broad categories:

Okay, enough theory. How do you buy one?

  1. Open a Brokerage Account: You need an account with a broker that allows you to buy stocks and ETFs. Options vary by country, but popular choices include:

    • US: Vanguard, Fidelity, Charles Schwab, Robinhood, M1 Finance.

    • Europe: Degiro, Interactive Brokers (IBKR), Trading 212, Scalable Capital.

    • AU/NZ: SelfWealth, Stake, Sharesies, IBKR.

    • Look for brokers with low or zero commission fees for ETF trades.

  2. Fund the Account: Transfer money from your bank account into your brokerage account. Start with an amount you're comfortable investing regularly and won't need for emergencies (you have your emergency fund, right?!).

  3. Choose Your ETF(s): Based on your goals and risk tolerance. For beginners, a single broad Total World Stock ETF (like VT) or a combination of a Total US Stock ETF (like VTI) and a Total International Stock ETF (like VXUS) is a common, simple, well-diversified starting point. This is NOT financial advice - do your own research!

  4. Place a Buy Order: Log in to your broker. Find the ETF you want using its ticker symbol (e.g., VTI). Choose "Buy". Decide how many shares (or what dollar amount if fractional shares are allowed). Use a "Market Order" (buys at the current best price) or a "Limit Order" (buys only if the price hits your specified limit). For long-term index investing, market orders are usually fine.

  5. Automate & Be Consistent (Optional but Recommended): Many brokers allow setting up automatic recurring investments into ETFs. Investing regularly (e.g., every month), regardless of market ups and downs, is called Dollar-Cost Averaging and is a great strategy for long-term growth.

  6. Hold & Ignore the Noise: Long-term investing means holding through market volatility. Don't panic sell when the market dips. Stick to your plan.

  • Investing is crucial to beat inflation and build long-term wealth.

  • ETFs offer a simple, low-cost way to get instantly diversified exposure to stocks or bonds.

  • Broad market index ETFs are excellent starting points for beginners.

  • Open a brokerage account, choose a simple ETF, start investing consistently (even small amounts), and focus on the long term.

Don't let analysis paralysis stop you. Starting small with a broad index ETF is far better than doing nothing. Educate yourself further, but take that first step!

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