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How to choose mutual funds to invest in (lemm.ee)

submitted 2 weeks ago by [email protected] to c/[email protected]

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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?

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[–] [email protected] 0 points 2 weeks ago

I mean among positions. If you have 50% apple, 50% nvidia, you only have 2 stocks. Mutual funds are different baskets of stocks, but they can overlap, ie a US and a World Total fund would be doubled up on US.

I focus on market-cap weighted total world funds. I have 2 ETFs, VT and BNDW, and yet am the most diversified possible.