4 Investing Moves You Should Try This Year

Tommy Wyher  |

Congratulations! Your debt is finally paid off and you have six months of income set aside in an emergency savings fund. As a result, you are ready to tackle the next stage of financial freedom. In order to begin truly building wealth, you need to begin investing your money so that it works for you. Having said that, how do you know where to begin? Investing as a newbie doesn’t have to be intimidating or stressful. Instead, simply follow the ensuing four easy investing tips and let this year be the year of growth for your money.

Diversify Your Investments

Think about this: if you have $1,000 to invest right now and you invest the entire amount in a single stock, you risk losing your entire investment in one fell swoop. A much savvier and more logical approach is to diversify from the very beginning by investing in a “basket” of investments in the form of a mutual fund or an exchange-traded fund (ETF).

Establish Investment Literacy

After all, what is investing anyway? As a beginner investor, you more than likely don’t have the knowledge base to make the best investments possible. But that’s to be expected - many people are in this same situation. So, don’t be afraid to ask questions. Before you start investing, build some financial and investment literacy by reading and speaking with people. You should browse Amazon for some of the best investing for beginners books, subscribe to personal finance blogs, magazines and podcasts, and play around with small microinvestments. This will help you build confidence and the ability to make strong investment decisions.

Find a Financial Advisor

Once you feel comfortable with investing on your own, you can save more money by taking a DIY approach to your investments. This is particularly true if you discover that you genuinely enjoy learning about the stock market. For the time being, however, you may want to consider consulting a professional financial adviser (fiduciary) to help establish a long-term investment plan. This can include creating your first investment account and deciding where to invest your money. Erik Gordon, CEO of ErGo Ventures LLC, a private equity and venture capital investment company, understands the importance of working alongside a financial advisor to help you manage your money as effectively as possible.

Think Long-Term

The volatility of the stock market can always be a scary thought for beginning investors. When you see your funds drop, you may be tempted to pull your money and put it in a no-risk savings account. On the flipside, however, many new investors get giddy when they earn money in the market and subsequently withdraw their investments to buy something new and exciting.

Always keep in mind that the true goal of investing is long-term financial growth and freedom. While your investments will fluctuate in the short-term, the nature of the stock market, as well as the beauty of compounding interest, will help you build wealth over time. Take a patient, long-term view and keep goals like early retirement and paying for your children’s college in mind at all times.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer


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