Why You Need to Invest in Funds Before Stocks

When you're just starting out with investing, you first need to build a diversified core before betting on individual stocks.

I’ve recommended many stocks. But I own just one: Amazon.com (AMZN). As an investment writer, I’ve learned that it’s hard to find an industry that the e-commerce giant isn’t disrupting these days. “Amazon’s world takeover continues,” I wrote shortly after the e-commerce giant bought Whole Foods. Some time later, I bought a couple of shares in my Roth IRA, and I plan to hold them forever. I felt secure in making a big bet on a single world-beating company because, despite what I said a few sentences ago about owning just one stock, I actually own thousands. When I began investing, I took the advice of Kiplinger’s, my dad and virtually every certified financial planner on the planet and spread my assets among several exchange-traded funds and low-cost mutual funds.

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Ryan Ermey
Former Associate Editor, Kiplinger's Personal Finance

Ryan joined Kiplinger in the fall of 2013. He wrote and fact-checked stories that appeared in Kiplinger's Personal Finance magazine and on Kiplinger.com. He previously interned for the CBS Evening News investigative team and worked as a copy editor and features columnist at the GW Hatchet. He holds a BA in English and creative writing from George Washington University.