Investing is one of the best possible ways to grow your wealth since it lets your money work for you and has the potential for high returns. Of course, there are always some levels of risk with investing, and the potential for losing money can turn many people away, especially those with no experience. While investing may seem complicated from the outside, it doesn’t have to be, and it can be one of the best long term decisions you ever make.
The most important thing to know before diving in is what exactly you’re investing for. Saving for retirement is one of the most common reasons, but you also might choose to invest in order to start or expand a business or to reach large financial goals faster. You’ll want to consider different options depending on what your aim is. Of course, there are also good reasons to invest simply for the sake of it. These are some great ways anyone can start investing, even with no experience.
Stocks
Most people probably think of the stock market immediately when hearing about investing. It’s one of the most popular options, after all, and news about the market is reported every day. Stocks can be a great option, especially for younger investors, so long as you keep a few important principles in mind.
One of the best pieces of practical advice you can get it to diversify your portfolio. Don’t just buy stock in one or two “safe” companies. It’s best to invest often across many avenues to protect yourself against downturns in the market. Another of the most important stock tips is to keep your emotions under control. It may be tempting to constantly check financial news, but if you make investment decisions based on quick reactions, you’re unlikely to make much money. It takes time for your investments to pay off, so try to avoid “resetting the clock” when you can.
Exchange-Traded Funds
ETFs are similar to mutual funds, but they lack the element of being controlled by a senior managing director meaning you’ll be in control of your own portfolios. ETFs are collections of financial securities like stocks, commodities, and bonds. These portfolios can be traded throughout the day and are listed on stock market exchanges. Since you’ll avoid managing fees with ETFs, they’re great options for cost-conscious investors.
A great way to invest in ETFs is with Canadian Couch Potato. A Couch-Potato portfolio can be automated to make recurring contributions, and it will display trades you’ll need to reach your financial goals. The Canadian Couch Potato blog also provides blog readers with financial media to help each one become a better investor.
Roth IRAs
A Roth IRA is an individual retirement account is an excellent option for young investors who want to get a jump on retirement. These accounts offer tax-free growth on investments, and once investors reach the age of 59½, they can start withdrawing their money tax-free. You can have a Roth IRA along with an employer’s 401k plan as well, so you’ll have two retirement portfolios. Downsides to a Roth IRA include the fact that contributions are not tax-deductible, and your contributions are limited based on your income level.
Follow Financial Experts
If you want to avoid bad investment advice and unhelpful articles during your investment journey, it’s a good idea to follow experts like Mark Wiseman. Mr. Wiseman is a global investment manager and an expert in long-term investing. He frequently posts about current financial trends, the global financial crisis due to Covid-19, and advice for investors.
You may also consider hiring a broker or other financial professionals in advisory roles. They can help you find the investments that make sense for you, no matter your experience level. Your success is also their success, so they’ll be motivated to give you the best possible advice.