You need a broker
A broker is the firm that holds your investments and places your orders. Investing apps are brokers with a simpler screen.
Check the firm is authorised before sending money. In the UK that means finding it on the Financial Conduct Authority's Financial Services Register. In the US, FINRA BrokerCheck does the same job. Scammers copy the names of real firms, so check the contact details match the register too.
Pick the right account
Most countries offer accounts that shelter investments from some tax. In the UK the main ones are the Stocks and Shares ISA and the pension (SIPP). In the US they include the IRA and the 401(k). Each has rules on how much you can put in and when you can take it out.
These rules differ by country and change over time, so read the current official guidance for where you live. A general investment account has no such shelter but usually no restrictions either.
The fees to look for
Brokers charge in different ways, and "commission-free" rarely means free.
- Dealing fee: a charge per trade, on some platforms.
- Platform fee: a yearly percentage or flat fee for holding your investments.
- Currency conversion: a percentage taken when you buy shares priced in another currency. It applies on the way in and the way out.
- Spread: the small gap between the buying and selling price.
- Fund fee: charged by the fund itself, inside its price, every year.
Placing an order
A market order buys straight away at the best available price. A limit order sets the most you are willing to pay and only goes through at that price or lower. For large, heavily traded companies the difference is usually small.
Many brokers offer fractional shares, so you can put a fixed amount into a company whose single share costs more than you want to invest.
Buying a whole portfolio
A portfolio of twenty companies is twenty holdings to buy. You can place each order yourself, in the right proportions, or use a broker feature that does the splitting. Trading 212 and M1 call theirs Pies, and Fidelity has Baskets: you set the percentages once and each payment is divided for you.
Arithmos gives you the list and the percentages, and can export them. You then enter them with your own broker. Arithmos never holds your money or places trades.
Keeping it on track
Prices move, so the percentages drift. A company that doubles ends up as a bigger share than you planned. Rebalancing means trading back to your original percentages, typically a few times a year at most.
Trading costs money and can create tax bills, so more often is not better.
The risks
- Fraud. Fake and cloned investment firms exist. Check the regulator's register every time.
- Costs. Frequent trading and currency conversion quietly eat into returns.
- Protection has limits. Compensation schemes may help if an authorised firm fails. They never cover investments simply falling in value.
Try it yourself
The quickest way to understand a portfolio is to look at one. Here is how to turn this guide into something you can inspect.
- 1
Start from the idea
The button below opens the builder with this guide's idea already typed in. Change any part of it: the number of companies, the countries, the limit per company.
- 2
Read the reason for every company
You get a list of companies, how much of each, and a plain-English reason for each pick. If one looks wrong to you, you can ask for it to be changed.
- 3
Look at the bad years, not just the good ones
The portfolio is replayed against real past prices. Check the biggest fall along the way, and ask yourself whether you could have sat through it.
- 4
Decide for yourself
If you want to act on it, you buy the shares yourself through your own broker. Arithmos never holds your money or places trades.
“20 large, well-known companies listed in the US, the same amount in each.”
Browsing portfolios other people have published is free. See pricing for what building your own includes. A tested result is a simulation using past prices. It is not a forecast and not a recommendation.
Common questions
Can I buy shares through Arithmos?
No. Arithmos is a research tool. It builds and tests portfolio ideas and gives you the list. You buy through your own broker, and Arithmos never holds your money or places trades.
What is a fractional share?
Part of one share. If a share costs 400 and you invest 100, you own a quarter of it and get a quarter of any dividend.
How often should I rebalance?
There is no single right answer. Many people do it once or twice a year, or when the percentages have drifted a long way. Each trade can carry costs and tax, which is the reason not to do it constantly.
