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?
Go for whatever is the most diverse, without dipping too heavily in any one area.
Thanks. What does "diverse" mean in that context? I split it equally into 4 chunks, although all Vanguard. Do you mean I should also put it into non-Vanguard mutual funds like Schwab, etc.? Vanguard is like 10 of the 30 of my options to choose from.
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.