Of the many ways in which the internet has changed the world, one of the best developments is how it has leveled the playing field for everyday people who want to invest. There are endless resources for novice investors to learn from, as well as oceans of information on publicly traded companies and other potential investments. Meanwhile, brokers and investment advisors have adapted by lowering fees, giving clients more options, and generally making investing easier and cheaper.

If you've been thinking about dipping your toes into the stock market, there's never been a time better than now.

Getting started

Setting up an investment account is as easy as picking a brokerage firm, going to their website, and going through an application process that typically takes no more than 15 minutes. If you don't have any strong preferences, using a discount brokerage is a good way to keep your fees as low as possible. Vanguard is the best-known of the big discount brokers (they more or less invented the industry). Other discount brokers include Scottrade, TD Ameritrade, Fidelity, and many more. Most big banks also have investment services now, so if you like to keep all your money with one institution, check with your bank to see if they have such an option. Just be sure to compare your bank's fees with those of the aforementioned discount brokers; there's no point in spending more to get the same service.

Couple looking at computer with financial advisor

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Fund the account

Once you've picked your broker and set up an account, you'll need to put some money in it. Brokers generally try to make it easy for you to give them your money; common options include electronic transfers and automatic transfer plans, which allow you to gradually build up your balance over time with no further effort on your end. You can also start at the other end by asking your bank to automatically transfer funds to your brokerage account at regular intervals. And if you prefer, you can go old-school and send paper checks to your broker to fund your investments. Some brokerage firms even allow you to snap a photo of a check with your smartphone and deposit it through an app.

Pick some investments

Once you have some money to play with, it's time to make some serious decisions and do some investing. If you know nothing about investing and want to keep it simple, then by far the best choice is to put your money in an index-tracking fund, whether it's a mutual fund or an ETF. Decide which index you want to track, then look for a fund that tracks the index in question. All the various funds that track that same index should perform more or less identically, so you should look for the one with the lowest fees.

Don't forget diversification

It's important to hold a wide range of investments in order to reduce your risks. The easiest way to diversify your stock holdings is to choose an extremely broad-based index for your index fund investment. Some funds actually track the entire market, which is about as broad as you can get. You can also choose to split your funds between two somewhat different indexes, such as picking a Dow Jones index fund and one that tracks small-cap stocks. However, diversification doesn't just mean picking different stocks; it's a good idea to have other kinds of investments entirely. Bonds are a great choice for this because they tend to gain value when stocks decline, and vice versa. They also carry lower risk, though their returns are generally tame and may not keep pace with inflation. Nowadays, there are plenty of bond index funds and ETFs that can make investing in bonds just as easy as investing in stocks.

Buy and hold

Now that you've picked out at least one stock fund and one bond fund, you're all set for quite a while. In fact, you can have an almost entirely hands-off investing strategy by setting up automatic transfers to your brokerage and having those transfers allocated to your stock and bond funds automatically. It's still important to check your accounts at least once a year to make sure that nothing important has changed, but assuming all is well, you likely won't need to make any changes for a very long time. Of course, once you get hooked on this whole investing thing, you may want to try something a little fancier, like picking out your own stocks or dabbling in more exotic investment strategies. By all means, try your hand at some of the more exciting stuff, but keep the majority of your portfolio in the stodgy old index funds. That way, even if your experiments fail, the bulk of your savings won't go down with them.

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