Learn to invest
- Know the basic tools
- Understand how markets work
- Plan your financial goals
Why invest
Prices rise every year, and inflation reduces the purchasing power of money that is not invested. Investing is the most common way to preserve and increase the value of savings over time. It is not about getting rich quickly, but about seeking a return above inflation.
Example: starting small
Suppose you invested about $42 a month in the S&P 500 at its historical average annual return of 11%. The estimated result after 50 years:
Total deposited
Estimated value after 50 years (S&P 500)
What investing means
Investing means placing money in assets with the aim of increasing its value over time. Instead of leaving it idle, losing purchasing power to inflation, the investor buys assets such as stocks, ETFs or cryptocurrencies that may appreciate. These assets can produce income, such as interest and dividends, and capital gains.
Investing is a common practice worldwide for building assets over time. You do not need to be an expert to start.
Stocks, ETFs, and crypto
When you buy a stock, you acquire a fraction of a company's capital. If the company grows and increases its earnings, that stake tends to gain value. An ETF is a fund that holds many companies in a single security, which helps reduce risk. These assets are bought and sold through brokers, and prices change throughout the day.
The most common asset types:
Starting with $5
You do not need thousands of dollars to start investing. Many brokers let you start with $1 or less through fractional shares, meaning you can buy part of a share with a high unit price, such as Amazon or Apple, without buying a full share. Over time, even small contributions can grow through compound interest.
That is enough to start building a portfolio over time
Returns earned start earning returns themselves. Capital compounds over time
Starting early matters more than starting with a large amount. Regular contributions are decisive
Why diversification matters
Diversifying means spreading capital across different investments so that a fall in one can be offset by the others. Every investment carries some risk. The central point is to know how much risk you are willing to take and to choose accordingly.
Government bonds, ETFs and savings accounts. Slower growth with lower volatility
Stocks. A balance between growth potential and risk
Crypto. Higher potential return and higher volatility
To simulate how an investment evolves over time, use the calculator:
Open the investment calculatorRead: What are ETFs?How an ETF works
An ETF (exchange-traded fund) holds many companies in a single security. Instead of picking one stock, you gain exposure to hundreds of companies in a single purchase. Below is SPY, the most popular ETF in the world. It tracks the S&P 500, which means exposure to the 500 largest US companies, many of them familiar.
Companies inside this ETF:
You have covered the basics
You now know what investing is, how markets work, and what stocks, ETFs and crypto are. Those are the basics. Create your free account to save your progress, or browse the assets on the platform on your own.
Popular starting points
* Capital at risk. This content is for educational and informational purposes only and does not constitute financial advice. Past performance is not a guarantee of future results. El Fondo is not a financial advisor, does not execute trades, and does not custody assets. Investing involves the risk of partial or total loss of capital.