Money Investing Tips for Beginners: Some Things to Learn Before You Start

If you’re new to investing, it can all seem overwhelming. There are so many different types of investments in every market imaginable. Some people are more comfortable investing in mutual funds, while others prefer to buy individual shares. It is essential that you carefully research all your options and then start with a small initial investment. Your broker or consultant should be able to give you money investment advice based on your risk factor, your current financial situation, and the amount of money you can afford to put into an account each month. Never invest with money you can’t afford to lose, even if market conditions and statistics seem to be in your favor.

Here are some tips to help you get started:

• “Simulated investment simulators” are available and free. It is really recommended that you practice using one of these before investing real money. Using this type of tool will really help you understand your level of risk factor and how you can diversify your portfolio in the most favorable way for you. You can also learn from your mistakes when using fake money in a simulated account so that you don’t make the same mistakes when investing real money.

More Money Investing Tips to Grow Your Wealth

• Don’t overlook the IRA option. Depositing money into an IRA account can be very rewarding, especially if you choose the right account. There are essentially two options: Roth and traditional. With the traditional option, contributions are deductible from your taxes. On the other hand, Roth contributions are not deductible, but the withdrawals you make in retirement will be tax-free.

• Consider how much of your portfolio should really be in stocks. Due to potential long-term fluctuations, it makes sense that younger investors could ultimately make a profit, as they literally have decades to wait for conditions on those stocks to be highly beneficial to them. Also, as people age, they tend to reduce exposure to stocks to preserve their capital. However, these are not rules set in stone. Every individual is different.

• Learn about the warning signs to watch for. For example, if there is a particular stock that keeps falling and falling for the last 3-5 years, you should probably stay away from it. Just look at the charts. Also, it’s pretty obvious that you don’t want to buy stock in a company that is currently under some sort of investigation.

The best money investing advice and tips can be found at The Motley Fool. There is a wide range of services, resources and tools (including free ones) to help you every step of the way.

Leave a Reply

Your email address will not be published. Required fields are marked *