How to invest in a specific market without investing in a specific company?
"You need to hope that a fund exists targeting the particular market segment you are interested in. For example, searching for ""cloud computing ETF"" throws up one result. You'd then need to read all the details of how it invests to figure out if that really matches up with what you want - there'll always be various trade-offs the fund manager has to make. For example, with this fund, one warning is that this ETF makes allocations to larger firms that are involved in the   cloud computing space but derive the majority of their revenues from   other operations Bear in mind that today's stock prices might have already priced in a lot of future growth in the sector. So you might only make money if the sector exceeds that predicted growth level (and vice versa, if it grows, but not that fast, you could lose money). If the sector grows exactly as predicted, stock prices might stay flat, though you'd still make a bit of money if they pay dividends. Also, note that the expense ratios for specialist funds like this are often quite a bit higher than for ""general market"" funds. They are also likely to be traded less frequently, which will increase the ""bid-ask"" spread - i.e. the cost of buying into and getting out of these funds will be higher."
"A REIT is a real estate investment trust. It is a company that derives most of its gross income from and holds most of its assets in real estate investments, which, in this case, include either real property, mortgages, or both.  They provide a way for investors to get broad exposure in a real estate market without going to buy a bunch of properties themselves.  It also provides diversification within the real estate segment since REITs will often (but not necessarily) have either way more properties than an individual could get or have very large properties (like a few resorts) that would be too expensive for any one investor.  By law, they must pay at least 90% of their taxable income as dividends to investors, so they typically have a good dividend rate (possibly but not necessarily) at the expense of growth of the stock price.  Some of those dividends may be tax advantaged and some will not. An MLP is a master limited partnership.  These trade on the exchange like corporations, but they are not corporations. (Although often used in common language as synonyms, corporation and company are not the same thing.  Corporation is one way to organize a company under the law.)  They are partnerships, and when you buy a share you become a partner in the company.  This is an alternative form of ownership to being a shareholding.  In this case you are a limited partner, which means that you have limited liability as with stock.  The shares may appreciate or not, just like a stock, and you can generally sell them back to the market for a capital gain or loss under the same rules as a stock.  The main difference here from a practical point of view is taxes:  Partnerships (of any type) do no pay tax - Instead their income and costs are passed to the individual partners, who must then include it on their personal returns (Form 1040, Schedule E).  The partnership will send each shareholder a Schedule K-1 form at tax time.  This means you may have ""phantom income"" that is taxable even though cash never flowed through your hands since you'll have to account for the income of the partnership.  Many partnerships mitigate this by making cash distributions during the year so that the partners do actually see the cash, but this is not required.  On the other hand, if it does happen, it's often characterized as a return of capital, which is not taxable in the year that you receive it.  A return of capital reduces your cost basis in the partnership and will eventually result in a larger capital gain when you sell your shares. As with any investment, there are pros and cons to each investment type.  Of the two, the MLP is probably less like a ""regular"" stock since getting the Schedule K-1 may require some extra work at tax time, especially if you've never seen one before.  On the other hand, that may be worth it to you if you can find one that's appreciating in value and still returning capital at a good rate since this could be a ""best of everything"" situation where you defer tax and - when you eventually do pay, you pay at favorable capital gains rates - but still manage to get your cash back in hand before you sell. (In case not clear, my comments about tax are specific to the US.  No idea how this is treated elsewhere.) By real world example, I guess you meant a few tickers in each category?  You can find whole lists online.  I just did a quick search (""list of MLP"" and ""list of REIT""), found a list, and have provided the top few off of the first list that I found.  The lists were alphabetical by company name, so there's no explicit or implicit endorsement of these particular investments. Examples of REIT: Examples of MLP:" "First, you need to figure out what your objectives for the money are.  Mostly, this boils down to how soon you are going to need the money.  If you are, as you say, very busy and you don't need the money until retirement, I'd suggest putting your money in a single target date fund, such as the BlackRock LifePath fund.  You figure out when you are going to retire, and put your money in that fund.  The fund will then pick a mix of stocks, bonds, and other investments, adjusting the risk for your time horizon. Maybe your objectives are different, and you want to become an trader.  You value being able to say at a BBQ, ""oh, I bought AAPL at $20"", or ""I think small caps are over valued"".  I'd suggest you take your $50,000, and structure it so you invest $5,000 a year over 10 years.  Nothing teaches you about investing like making or losing a bit of money in the market.  If you put it all in at once, you risk losing it all - well before you've learned many valuable lessons which only the market can teach you. I'd suggest you study the Efficient-market hypothesis before studying specific markets or strategies." "You own a fractional share of the company, maybe you should care enough to at least read the proxy statements which explain the pro and con position for each of the issues you are voting on. That doesn't seem like too much to ask. On the other hand, if you are saying that the people who get paid to be knowledgeable about that stuff should just go make the decisions without troubling you with the details, then choose the option to go with their recommendations, which are always clearly indicated on the voting form. However, if you do this, it might make sense to at least do some investigation of who you are voting onto that board. I guess, as mpenrow said, you could just abstain, but I'm not sure how that is any different than just trashing the form. As for the idea that proxy votes are tainted somehow, the one missing piece of that conspiracy is what those people have to gain. Are you implying that your broker who has an interest in you making money off your investments and liking them would fraudulently cast proxy votes for you in a way that would harm the company and your return? Why exactly would they do this? I find your stance on the whole thing a bit confusing though. You seem to have some strong opinions on corporate Governance, but at the same time aren't willing to invest any effort in the one place you have any control over the situation. I'm just sayin.... Update Per the following information from the SEC Website, it looks like the meaning of a proxy vote can vary depending on the mechanics of the specific issue you are voting on. My emphasis added. What do ""for,"" ""against,"" ""abstain""and ""withhold"" mean on the proxy card or voter instruction form?   Depending on what you are voting on,   the proxy card or voting instruction   form gives you a choice of voting   ""for,"" ""against,"" or ""abstain,"" or   ""for"" or ""withhold."" Here is an   explanation of the differences: Election of directors: Generally,   company bylaws or other corporate   documents establish how directors are   elected. There are two main types of   ways to elect directors: plurality   vote and majority vote. A ""plurality vote"" means that the   winning candidate only needs to get   more votes than a competing candidate.   If a director runs unopposed, he or   she only needs one vote to be elected,   so an ""against"" vote is meaningless.   Because of this, shareholders have the   option to express dissatisfaction with   a candidate by indicating that they   wish to ""withhold"" authority to vote   their shares in favor of the   candidate. A substantial number of   ""withhold"" votes will not prevent a   candidate from getting elected, but it   can sometimes influence future   decisions by the board of directors   concerning director nominees. A ""majority vote"" means that directors   are elected only if they receive a   majority of the shares voting or   present at the meeting. In this case,   you have the choice of voting ""for""   each nominee, ""against"" each nominee,   or you can ""abstain"" from voting your   shares. An ""abstain"" vote may or may   not affect a director's election. Each   company must disclose how ""abstain"" or   ""withhold"" votes affect an election in   its proxy statement. This information   is often found toward the beginning of   the proxy statement under a heading   such as ""Votes Required to Adopt a   Proposal"" or ""How Your Votes Are   Counted."" Proposals other than an election of   directors: Matters other than voting   on the election of directors, like   voting on shareholder proposals, are   typically approved by a vote of a   majority of the shares voting or   present at the meeting. In this   situation, you are usually given the   choice to vote your shares ""for"" or   ""against"" a proposal, or to ""abstain""   from voting on it. Again, the effect   of an ""abstain"" vote may depend on the   specific voting rule that applies. The   company's proxy statement should again   disclose the effect of an abstain   vote." "Well, this sub is generally pretty darn good. Among us are investment bankers, private equity analysts, valuation analysts, portfolio managers, traders, brokers, bachelors, masters, and doctorate students, etc. We're helpful, though sometimes snarky, and have an exceedingly low tolerance for bullshit.  I love it here.  And while your logic is sound, we can actually explore private equity directly, as while private and public equity are related, they are different enough to study separately, in my opinion.  Private equity deals with private companies. By definition, these investments are illiquid (they cannot be easily sold like public stocks), and unmarketable (there is no ready market to trade these investments, like stock). They are generally held for longer time periods.  At its earliest stage, private equity is synonymous with ""initial investment"" or ""seed funding."" This includes (if we are maybe slightly liberal with our definition), the initial investment an entrepreneur makes into his business. At this stage, friends and family, angel investors and venture capital are present. At different points of a company lifecycle, different financiers become interested/applicable (mezzanine investors, etc.).  The investment made into a company allocates a certain percentage of the ownership of the company to the investor in exchange for cash (usually). This cash is used to cover expenses and take on capital projects. The goal of these investments is to directly make the company (and its value, and thus the investor's value) grow.   At some points in time, a new investor will show up and either invest directly in the company (same as before) or buy another investor's holding in the company (in which case, cash goes to *that specific investor* and *not* the company).   At every stage of investment leading up to IPO, the deals are negotiated between the parties. The results of a given negotiation determines the value of that company's equity. For example, if I pay you $100 for 50% of your company, the company's implied worth is $200. If two days later, Joe comes and offers to buy 33% of the company for $100, the Company is worth $300. (Special note: these percentages are assumed to be the allocation of equity **after** the deal. In this last case, the ownership of your company would be 33% you, 33% me, and 33% Joe. This illustrates something called *dilution,* which is very important to investors as it effects their eventual potential payoff later down the road, along with some other things).   At this point, do you have any questions?" I think your best strategy is to learn more about the behavior of what you're investing in.  Learn everything you can about it.  Specialize in it.  The more you study, the more the proper strategy will present itself. Answer the questions you ask in paragraph 3 through your own study. "Chris - you realize that when you buy a stock, the seller gets the money, not the company itself, unless of course, you bought IPO shares. And the amount you'd own would be such a small portion of the company, they don't know you exist.  As far as morals go, if you wish to avoid certain stocks for this reason, look at the Socially Responsible funds that are out there. There are also funds that are targeted to certain religions and avoid alcohol and tobacco. The other choice is to invest in individual stocks which for the small investor is very tough and expensive. You'll spend more money to avoid the shares than these very shares are worth.  Your proposal is interesting but impractical. In a portfolio of say $100K in the S&P, the bottom 400 stocks are disproportionately smaller amounts of money in those shares than the top 100. So we're talking $100 or less. You'd need to short 2 or 3 shares. Even at $1M in that fund, 20-30 shares shorted is pretty silly, no offense.  Why not 'do the math' and during the year you purchase the fund, donate the amount you own in the ""bad"" companies to charity.  And what littleadv said - that too." "Kudos for wanting to start your own business.  Now let's talk reality. Unless you already have some kind of substantial track record of successful investing to show potential investors, what you want to do will never happen, and that's just giving you the honest truth. There are extensive regulatory requirements for starting any kind of public investment vehicle, and meeting them costs money.  You can be your own hedge fund with your own money and avoid all of this if you like.  Keep in mind that a ""hedge fund"" is little more than someone who is contrarian to the market and puts their money where their mouth is.  (I know, some of you will argue this is simplistic, and you'd be right, but I'm deliberately avoiding complexity for the moment) The simple truth is that nobody is going to just give you their money to invest unless, for starters, you can show that you're any good at it (and for the sake of it we'll assume you've had success in the markets), and (perhaps most importantly) you have ""skin in the game"", meaning you have a substantial investment of your own in the fund too.   You might have a chance at creating something if you can show that whatever your hedge fund proposes to invest in isn't already overrun by other hedge funds.  At the moment, there are more mutual and hedge funds out there than there are securities for them to invest in, so they're basically all fighting over the same pie.  You must have some fairly unique opportunity or approach that nobody else has or has even considered in order to begin attracting money to a new fund these days.  And that's not easy, trust me. There is no short or easy path to what you want to do, and perhaps if you want to toy around with it a bit, find some friends who are willing to invest based on your advice and/or picks.  If you develop a track record of success then perhaps you could more seriously consider doing what you propose, and in the meanwhile you can look into the requirements for laying the foundations toward your goal. I hope you don't find my answer cruel, because it isn't meant to be.  I am all about encouraging people to succeed, but it has to start with a realistic expectation.  You have a great thought, but there's a wide gulf from concept to market and no quick or simple way to bridge it. Here's a link to a web video on how to start your own hedge fund, if you want to look into it more deeply: How To Legally Start A Hedge Fund (From the Investopedia website) Good luck!" Investing money in the stock market with [Compound Stock Earnings](http://www.compoundstockearnings.com) is a great way to build wealth and plan for the future. However, few people know what the stock market is let alone how to begin investing in it. It is important to understand how companies and stocks work before investing in them.