I'm wondering about if this sort of thing exists, the idea is that you invest in a company to do investing for you, they check the market, talk to investors about smart choices etc for a small cut of your investment, does this sort of thing exist? To me it seems like theres no reason it wouldn't, I'm super new to investments so I might be wrong here.
That thing is called a mutual fund.
They are readily available, either as a mutual fund proper, which has rules for investing and withdrawing, or as an exchange-traded fund, which trades in real time just like a stock.
What you are specifying is an actively managed mutual fund, where a monkey throws poo at a wall to pick stocks at random ... and either beats the market average (an index like the S&P 500) or not. Oh wait, you want human-managed mutual funds, which replace the monkey with a genius stock picker and an army of research staff. That ought to work better, right?
The other option is index funds, which simply are the index because they buy every stock in the index.
The expenses of running the fund come out of the profits in the fund; this is called an *expense ratio**. The expense ratio is guaranteed 100% loss to you. For instance, the monkey fund pays its stock picker bananas. So does the index fund, as it's simply an intern checking daily to make sure the fund portfolio matches the index. The expense ratio of human-managed funds is not so low: As much as 1.6% per year. Since you expect about 10% per year average return, 1.5% is kind of a big bite out of profits.
The question is whether the managed fund beats the index by enough to justify its expense ratio. The canonical work on that question is John Bogle's Common Sense on Mutual Funds. You might read it.
Berkshire Hathaway does exactly what you want. Each share is $331,000, so you probably won't be investing in it...
For us mere mortals, actively managed mutual funds and ETFs do the same thing, except they're funds managed by brokerage firms, not companies.
Many firms offer them. Three popular ones are, alphabetically:
- Charles Schwab
Yes, there are in the UK. They are called investment trusts (though they aren’t really trusts in the normal sense of the word — they are companies). Around 60 of the 350 companies in the FTSE-350 list of the biggest listed companies in the UK are investment trusts.
Many good answers here already. Your best bet would be to read up on investing in index funds, JL Collin’s stock series is a great source on this. Simple, easy to understand and will save you a butt loaf of money in the long run.
If you don’t feel like learning though there are many companies out there willing to take your money, analyze your risk tolerance and give you a pre-packaged plan. Websites like wealthsimple, and Betterment. I’ve analyzed the returns you get from these and wealthsimple seems like a scam, while betterment is actually pretty decent. There’re a lot of companies out there, but at the end of the day none of them are going to care about your money as much as you do, so you’re better off building your understanding and doing it yourself.