Found an email I wrote when I tried to explain this to someone else:
Stock picking isn't really something I tell people to do, I'm more about broad-based investing and think that should be the way for most people who are just starting out and trying to learn about the market. What I mean by that is instead of opening an account and purchasing X amount of shares of Apple stock, you can purchase a fund that gives you interest in Apple as well as other companies so you spread the risk you are taking around.
Real-time example would be to purchase something like (
https://investor.vanguard.com/mutual-funds/profile/VFINX) this which would be effectively investing in the S&P 500 which is the largest 500 publicly traded companies in the US, so not only do you own a piece of Apple, you own a piece of Facebook, Google, Amazon, Netflix, etc etc etc. That way if Apple is having a bad day, you don't stand to lose as much as you have hundreds of other stocks in the fund which could be having good days to help offset the loss. The inverse of that is say Apple has a good day, the fund won't be up as Apple stock as the other stocks in the fund may not be having that good of a day.
The reason I mentioned the S&P 500, in particular, is because of the fact that its the most popular Index (
https://www.investopedia.com/university/indexes/index1.asp) and good baseline for someone who is just starting to invest to keep track of. Something else I mention to people who are just starting out investing is a method that is known as the "Core-Satellite approach". What that means is investing the bulk your money into a passive fund like the one I mentioned above and then buying smaller amounts of other funds/single stock. So if you have an idea that you think is going to work you can put money into it but also know that the bulk of your money is in a more diversified and therefore less risky asset.
If you're not open to being responsible for picking the investments yourself, there are options online where you can give your money to them and they'll pick the investment for you for a small fee (by small I mean less than 1% of the value of your account, typically around a quarter of one percent). For example theres a Service called Betterment (
https://www.betterment.com/) where they will take your money and invest it into a number of index funds similar to the one that I mentioned earlier. There are a ton of these out there (
https://www.barrons.com/articles/the-top-robo-advisors-an-exclusive-ranking-1532740937) but I am partial to Betterment because when you give them your money, they invest every cent which is better for you in the long run.
The last thing I'd mention is that when it comes to investing, the best thing you can do is start early, invest as much as you can reasonably afford to, and reinvest the money that you make. Reinvesting the money that you make is probably the most important thing because the money compounds upon itself and grows at a faster rate than if you were to keep pulling out the money that you've made (
http://wealth.visualcapitalist.com/visualizing-power-compound-interest/)
http://wealth.visualcapitalist.com/how-to-start-investing/ This link provides an overview of what I hope made sense above, I'm bad at explaining these kinds of things
(
http://wealth.visualcapitalist.com/visualizing-power-compound-interest/) this link is probably the most important one of them all. The math behind reinvesting the dividends (the income that you earn from certain stocks/funds) can't be argued against.
