Is investing new to you? Have you been thinking about giving it a try, or perhaps already have and need some tips? One of the best tips for new investors is to start slowly and carefully. Unless you can afford to lose it, don’t just put money into something or buy stock on a whim.
There are many helpful resources and guides online to help you get started and keep you going along the way as you gain more and more experience and build your portfolio. Instead of hiring a broker, you can use a Robo-advisor and maybe acquire broker-assisted trades when you need to. Depending on your trading app, a broker-assisted transaction may or may not involve a small fee.
Another essential tip is to get your current and near-future finances in order before you even begin to invest. Experts recommend that investors maintain three months’ worth of expenses in an emergency fund/savings (6 months would be even better). Make sure you are on top of all of your bills and debts as well. Staying out of debt (or at least getting out of it) is among the best tips for new investors. You should not be risking money – no matter how solid and profitable the potential investment is – you should use that to pay debts instead.
Tips for New Investors – First, Get a Plan
Decide how you plan to invest and what kinds of investments you are interested in. As mentioned above, there is no longer a need to have a broker agent to handle your trades for you. There are still options for those who do not feel confident enough to begin trading independently, such as a portfolio manager. A Robo-advisor is a good compromise for many new and intermediate investors.
DO NOT START INVESTING if you are not familiar with all of the terminology. Know the difference between individual stocks and mutual funds or exchange-traded funds (ETFs). Individual stock buying can be risky for beginners due to the pitfall of jumping on a particular stock just because of a current trend. Mutual funds and exchange-traded funds (Standard & Poor’sPoor’s 500 Fund) provide investors a simpler way of diversifying their portfolios.
Any list of tips for new investors should include a reminder to be patient and prepared to wait it out for the long-term. Adding some short-term investments to your portfolio is okay as well, but you don’t want to focus on them as much as the long-term ones.
Lastly, look into quality publications that provide tips for new investors, such as Motley Fool. It’sIt’s a good source of information about a variety of different investment opportunities.