If you’re new to investing, you’ll know that it can be scary to think about what might happen if you make the wrong investment choices. Today we’ll share some tips that will answer those tough questions for those new to investing.
Start with Education
If you’re a beginner investor, don’t put a dime of your money anywhere without first learning the basics of investing. Learn about the history of the stock market, learn about the different types of investment choices, and read well-known and highly recommended books for investing.
The goal is to not go into investing blindly and without some knowledge of the investing world. Many beginner investors have fallen for the lure of instant wealth and jumped into a foolish investment, leaving them broke and ready to leave the world of investing behind for good. Don’t be one of them: look before you leap, and take advantage of the many resources out there via books and the Internet that will help educate you on what you need to know before you start investing.
Don’t Be Carried Away by Your Emotions
It’s easy when first investing money to be carried away by the excitement of great returns, or carried away by the fears of market dips. Choose to plan for a long-term investment strategy, knowing that most investments do better over the long haul. Don’t be tempted to check the market every week to make sure your money is still there. Instead, make a plan to assess your investments quarterly, semi-annually or annually, and then make educated adjustments from there if need be. A successful investing technique is one that doesn’t let emotions determine actions.
Diversification is vital when it comes to investing for beginners. Never put all your investing eggs in one basket, lest that basket drops to the ground and shatters. Work to learn of the different investment options. For instance, retirement investing can consist of 401k plans, Roth IRAs or a host of other retirement plan options. Non-retirement investing can include index funds, individual stock or commodities purchases, real estate investing or one of many others. Before putting one dime of your money into investments, educate yourself about the different retirement and non-retirement investment options, and decide which investment vehicles you’re most comfortable with, most knowledgeable about, and which investment vehicles make the most sense for your particular financial situation. You can use Personal Capital which has a free investment tool to help you make more educated decisions when it comes to investing your money.
99% of all successful investors don’t attain investment wealth overnight. Education, patience and choosing to hold for the long-term are key. Don’t choose to get into investing with the goal of going from hundred-aire to millionaire in a short period of time. Instead, let your money work for you, growing gradually and steadily, knowing that if you stay the course, wealth will come.
It’s normal for the unknown, whether in regards to investing or anything else, to be a daunting concept. However, if you’re willing to take the time to make the unknown become known, and familiarize yourself with investing rules and basics, you can become a successful investor.
What’s your favorite investing tip? What investing mistake have you learned the biggest lesson from?