How to Invest For Beginners: Some Smart Tips
If you’re a novice investor, Wall Street certainly can make getting started intimidating. Most of the jargon and investing terms thrown around can even make an experienced investor’s head spin.
In fact, much of this confusion you’re probably facing is intentional. Many big banks and brokerages would love for you to think that the only way to start investing is to use an expert, and they want to obscure your options for seeking professional help.
Thankfully, if you’re wondering how to invest for beginners, you don’t have to get twisted up in knots over complex terminology. Here are some relatively simple tips to get you started:
Seize the Moment
Although you’re probably hesitant to dip your toes into the investing pool, realize that time is a huge advantage for long-term investing. Your wealth can compound – meaning that the interest you earn each year is added to your principal, so that the balance doesn’t merely grow, it grows at an increasing rate. By starting early, you can harness the power of this for years, and even decades if you’re investing for retirement.
Keep it simple by diversifying
Contrary to what the media and most money managers will tell you, successful investing doesn’t have to involve timing the market, or possessing the wisdom to pick the next booming stock. In fact, if you’re investing for the long-term, this approach will probably have the exact opposite effect.
While picking and heavily investing in the next Google might result in a freak windfall of cash, it’s highly unlikely to happen. The truth is that picking a winning investment and concentrating your allocation can be more akin to gambling than smart investing.
That’s why you should consider a well-diversified portfolio, which can reduce risk and improve returns. Although you may miss a freak windfall, you’ll also avoid the heartbreak of a big loss, and be more likely to achieve long-term investing success.
Consider utilizing a fiduciary advisor
Don’t discount the value a trusted financial advisor can bring to the table. A fiduciary advisor (who is legally required to act in your best interests) can help you get started with investing. A trusted fiduciary advisor will sit on the same side of the table as you, and provide the best investment advice possible.
At LexION Capital, we’re a fiduciary firm, and have been since day one. We’re solely focused on finding the highest quality and lowest cost investment solutions to meet your financial goals and needs. If you’d like to learn more, contact us today.