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Employee

Question

How to start investing

Forum|Forum|7 years ago
October 27, 2018
13 replies
0 views

I am just starting out and have a pretty decent credit score. I’m also starting save up some money but I like to plan ahead. What are a few things you guys would suggest to start investing? What should I look for?

Carl11_2

Employee

Rule #1 - Do not invest what you are not willing to lose

Rule #2 - Consider all monies invested as lost, permanently and forever, within the first minute of having made said investment

Rule #3 - Other investors do not give you tips for "your" benefit. They do so for their own benefit. It's the name of the game.

Generally I myself only invest for the long term. I don't "play the markets" because I'm not yet that rich, and probably never will be. I find three types of mutual funds to be right for me. I invest equally in growth funds, growth and income funds, and about 15-20% of invested funds into foreign markets. Make google your best friend, and do your homework to learn about this stuff. Don't rely on other's to "educate" you for your benefit. They're not going to.... but they will lie to you about it. That's why they're so successful at it.

DJS

Employee

I would agree with most of what has already been said, but let me add a bit of practical advice as well. As a first time small investor you should be investing in a broad range of equities across most economic sectors. The most practical and least costly way of doing that is to invest an an Exchange Traded Index fund (ETF), something like the and S&P 500 index ETF or the total stock market ETF. For example, and only for example, SPDR S&P 500 ETF (SPY), or Vanguard S&P 500 ETF (VOO), or Vanguard Total Stock Market ETF (VTI), and similar products. Second, invest what you can afford to live without, but invest regularly (dollar cost average). Over time you will realize the benefits of the economy's growth, but there will be times when your investments depreciate. Just stick with it for the long run. If you have some money in the bank that you're not prepared to lose, but you'd like to earn some better interest on those funds, think of investing in Treasury bills. You can buy T-bills directly though a Treasury Direct account in amounts of a little as $1000, and it's simple to set up an account. Right now a 91-day T-bill is yielding about 2.4% and the investment is the safest in the world. The Treasury site is: https://www.treasurydirect.gov/

Good luck

Answers are correct to the best of my ability but do not constitute legal or tax advice.**If this post is helpful please click on "thumbs up"**

migox44

Hi there!

Thanks for the info! I am not really knowledgeable about investing or stocks but I'm very interested to know more. Any references and information books that you can recommend?

Regards!

dsjohns

Employee

Educate yourself. Asking questions is a great first start!

I think one of my favorite starter guides is "If You Can" https://www.etf.com/docs/IfYouCan.pdf

It is meaty, but full of sound advice that is focused on helping one person, and that's you!

Good luck!

BMilici

I'm in a similar boat, not too familiar with investing, just saving. Would love to see some more ideas on where to start, and what to look out for from those who have been there!

lwdupont

Employee

@BMilici I'm a big fan of 401k's - at least for companies that offer them like Intuit, we've got a great plan with some great index funds with great matching.

And the earlier a person starts, the better. I was a big Motley Fool person many years ago, and the graph on this page really spells it out for me:

https://www.fool.com/knowledge-center/compound-interest.aspx

But, when I hear "I want to start investing", I always go to "investing for retirement". :)

ThickAsABrick

Employee

I'd buy JL Collins' book "The Simple Guide to Investing." BEST BOOK I've ever read. Wish I'd seen it years ago.

It's basically a homage to the John Bogle method but simplified:

a) buy index funds that invest in the entire market ("why find try to find a needle in a haystack? buy the entire stack!")

b) make sure the funds are VERY LOW cost ones (below 0.1%) for their expense ratios... which is critical in the long run

c) determine your balance between stock and bond FUNDS (more stocks in your youth)

d) don't pick individual stocks (it's generally a losing game for most)

e) don't try to time the market (even experts can't do it)

THAT'S IT. Set it and significantly forget it (with only the occasion re-balancing of those ratios as you age).

The book is a terrific read.

[P.S. - of course I'm referring to RETIREMENT investing. If you have money you are willing to lose and want to just "play" - there are oodles of ways to go. But in the long-term good ETFs are best.]

Geerts83

Employee

https://act.webull.com/i/AZPYBnFifYf1 This is a good app for learning to invest. It has paper trading for practice, and when you're ready you can give it a shot. I've recommended to several friends who are in the same situation and they've been enjoying the education.

ANSWERS2

Employee

Invest? meaning its money your willing to lose.... or save for your future?

If you want to save money for your future. Put it in a matched 401K associated with your job. Contribute your max each year, especially if your workplace matches it.

But dont stop there.... Open up a Roth IRA, protects your money for the future, much higher yield than putting it in a savings account, and with companies like Fidelity, you can start by putting in as little as 50 dollars a pay period.

By the time you ready to, send kids to college, retire... go on a kick ass vacation? whatever. Youll have the funds from your IRA without having to dip into you daily accounts.

Good Luck!

marketstar99

Employee

Like many long-term endeavors, to succeed in investing you must “know thyself”

That is to say, the better you know yourself, your own temperament and risk tolerance, the better chance you have of succeeding,

A great way to determine your best long-term investment strategy is to take a short asset allocation/risk tolerance test at the following link: https://personal.vanguard.com/us/FundsInvQuestionnaire
This test will determine your optimal mix of stocks, bonds, and cash reserves.

If practical, consider a disciplined dollar cost average approach which involves contributing a fixed dollar amount at certain intervals such as investing once a month in a 401(k). This strategy will have the effect of buying more shares when the market is down and fewer shares when the market is more expensive which will keep your costs low. In addition, you will have the great advantage of keeping emotion out of your investing.

Wishing you all the best of good buys,
Marketstar

N_Davidson

Employee

I honestly prefer long term savings plans. I was never very good at investing money off the bat. I reckon that there are a few funds that you could put your money into where the returns would be more balanced out, but decent way of growing your money. Anything would be better than just leaving it in the bank honestly. Make sure that you keep a decent amount of savings to cover any losses too!

AdrianG001

There are many investment instruments for you to choose from. The most popular include:

Stocks

A stock is a share of ownership in a company. Stock prices move based on investors’ evaluation of the company’s performance, including leadership changes, new product releases or how it’s doing financially.
Companies issue stock to the public to raise money to grow or pay off debt. Stocks are also known as equities.

Bonds

A bond is essentially a loan to a company or government entity, which agrees to pay you back in a certain number of years. In the meantime, you get interest.
Bonds generally are less risky than stocks because you know exactly when you’ll be paid back and how much you’ll earn.

Mutual funds

A mutual fund is a mix of investments managed by an individual company. When you invest, you don’t choose specific stocks or other securities; the mutual fund does it for you. The inherent diversification of mutual funds makes them generally less risky than individual stocks, but there are mutual funds available at all risk levels.
Popular mutual funds include index funds, which follow the performance of a particular stock market index, and money market funds, which invest in short-term, low-risk assets.

Exchange-Traded Funds (ETFs)

An ETF is a basket of securities — stocks, bonds, commodities or some combination of these — that you buy and sell through a broker. They combine the diversification benefits of mutual funds with the trading ease of stocks and are available at various risk levels.
Index funds are also common among ETFs — and they generally carry lower associated management fees than mutual funds.

Regards,

Adrian

Tax Consultant

D_Hamilton

Employee

You need to be willing to take a huge risk which is involved with investments. Be prepared to lose what you invest. Thus, only invest a certain amount that you are willing to part with. That is the first main factor to consider and the rest will fall into place.

1LuckyGirl21

Employee

Everything you need to know starting out as a noob can be found here. https://www.investopedia.com/

If you plan on "Social Trading" sites as I refer to then such as stocktwits or social wall street and yahoo beware of "pumpers" #1 Rule. Trade YOUR style of trading and don't chase bc of FOMO. You trade the trend and what is moving. Cut your losses quickly and let your winners run. Best of Luck!

harrygeorge

at ethraa, we provide the opportunity for investments. you can invest in solar financing and in renewable energy. for more details visit our site by clicking here

Rocket J Squirrel

Employee

Check out the organization American Association of Individual Investors (AAII). They are non-profit, unbiased, and impartial. Buy a 1-year subscription and you will learn things.

Beware of organizations like Motley Fool, who will make you pay for each bit of advice. They are in it for their own profit more than yours.