Have you long had a desire to invest but just don’t know where or how to start? The world of investing can definitely feel intimidating because there’s so much to know and seemingly not enough time to soak it all in. However, there are some ways to slowly get into the investment game where you’ll feel comfortable with both the pace and the amount of money you’ve started with.
Let’s take a look at investing for beginners strategies that could, in a short amount of time, help you feel like the confident investor you aspire to be.
1. Get Educated
It’s natural to want to just dive into investing with the money you’ve set aside, but it’s better to first become educated about the process so you don’t quickly lose what you have. Whether you find investment software to hold your hand through the process or find an expert who can teach you the ins and outs, it’s important to understand the basics of investing before getting started.
Many seasoned investors have recommended the book Investing for Dummies as a great starting place for people to learn since it helps to answer basic investment questions. For instance, you might want to know:
- What is the difference between stocks and bonds?
- What is an ETF?
- What is a mutual fund?
- Are deposit accounts like CDs and money market accounts riskier than open-end funds?
If you’ve had these and other questions, educating yourself before making your first move is the best way to start. Of course, you don’t need to know everything right away, but you should at least understand the potential risks you’re taking.
2. Create a Strategy
Creating an investment strategy may sound like the most difficult part of the process, but once you learn some basics of beginners investing, you’ll see that creating a strategy isn’t hard at all.
If you have some money you can afford to lose then you might try purchasing a few stocks. However, if your goal is to ensure you earn a return, you might try safer routes like bonds or even CDs.
Once you’ve taken time to map out where you’d like to begin, it’s time to get started.
3. Invest Online and Start Small
One way to get your feet wet is by investing online. Starting with an online investment is a great way to dive in because so many tools are available over the internet. Of course, you could use an in-person broker who could offer live advice, but many find that online brokerages are not only more affordable, but extremely informative—especially if you use one of the top 10 brokerages.
Once you’ve found a brokerage you’d like to work with, you could start as low as $50 to $100 by opening a brokerage account. A mutual fund is a good choice because it automatically diversifies your investment by dipping into an assortment of securities and assets like stocks, bonds and property.
Just like any other investment option, by allowing your money to sit in an account—only trading when you see that another fund is better for you—your money will start to grow. Even better, once you feel confident in your ability to make good trading decisions, you could start adding $50 to $100 to your account each month.
One thing to remember when investing, however, is that it’s good to keep your transaction costs as low as possible to avoid losing money in trading fees (ShareBuilder charges as little as $4 per trade).
4. Use Tools Offered to You
Being able to begin a financial investment with a small amount of money makes riskier investments feel less so. What makes the process flow even smoother is using the tools online brokerages make available to help you learn as you go.
For instance, your brokerage may offer the ability to schedule investments so you don’t have to worry about forgetting to do it yourself. Also, some may offer step-by-step tutorials for using their sites (how to fund your account, choose a fund or company to invest in, make regular investments and more) and also provide access to stock reports, real-time quotes and other trading resources.
Really, there’s no best investment company or website to look for because so much of the right choice depends on your personal investment preferences. This means it’s up to you to dive in, choose an investment route and get started. The sooner you start, the sooner you’ll feel confident about your ability to become a seasoned investor.