Will the Real Average Joes Please Stand Up?

I call myself "The Average Joe Investor," which suggests that I'm just like everyone else and that if I can invest, then anyone reading this can invest. Or at least that was my intention behind the name. And it's true to a large extent -- I don't have any special powers, I don't have an MBA or CFA, and I don't have a long history as a stock analyst or trader (now you're wondering why you're reading this at all...). Sure, I work in the finance industry, but it's helping The Motley Fool bring investing to more individuals -- just like I've always hoped to do here.

But -- and that's a big but -- there is something that separates me from many truly average Joes out there. Namely, I'm interested in investing, interested in stocks, and interested in financial analysis. And unfortunately, I don’t think that individuals should bother investing if they don't have some interest in it -- even more so if their primary motivation is to get rich quick from the stock market.

However, for most of the population out there that would rather eat a live worm than read an annual report, there's no need to skip over stocks altogether. For years, investing greats like Warren Buffett and Jack Bogle have been harping on the vehicle that is perfect for the, let's say disinterested, investor. And that vehicle is index funds.

Index funds give you a broad exposure to a market and charge very low management fees, meaning that you benefit from the appreciation of the overall market without having to spend the time to pick and analyze stocks, or overpay for somebody to manage your money. In terms of which index funds to go with, an S&P 500 fund (such as Vanguard's) or a wider US market fund (like the Wilshire 5000) should probably be the core of your investment portfolio. But today there are a handful of other areas that you can also get exposure to through index funds, including both developed and emerging international markets and bonds -- all of which should probably claim some portion of your portfolio.

In the end, I think one of the biggest questions when it comes to investing isn't whether you're smart enough or talented enough, but whether you have the interest. If you're not interested in investing you're simply not going to do all the work necessary to get the results that you want. And you'll likely just end up wasting both time and money. So if you're new to investing, take some time to sit down and really think about whether business analysis, financial statements, and industry research are really interesting to you. If not, it's no big deal, just put your money into index funds and realize that you've saved yourself a lot of time and effort that you can now turn towards a hobby that you actually enjoy.

Of course if you come to the conclusion that this is all really interesting to you, well, keep learning and keep investing!

-AvgJoe