Financial Advisor in Raleigh NC: 5 Tips For New Investors

Investing is a great way to grow your wealth over the long-term but it can seem intimidating if you haven't done it before.

As a new investor, you should start by educating yourself about the basics of investing. Once you understand the basics of investing you will need to determine your financial goals and risk tolerance.

1. Make sure you're on solid ground financially

Before you start investing, build a solid financial foundation. We suggest that you should have some emergency savings before you start investing elsewhere. This could be anywhere from 3 to 6 months of essential monthly expenses.

Also, make sure you have paid off any high-interest debt such as credit card bills. It could be wise to take advantage of all employer matching programs for contributions to accounts like your 401(k) or HSA too. 

2. Determine goals

Setting goals will give your investing a purpose and provide a finish line for your hard work. To determine your goals, spend some time figuring out what's important to you. A goal can include everything from paying your monthly bills to buying a new car or home, or even saving more for retirement. We suggest physically writing your goals down, and placing them somewhere you regularly see, so that you are reminded of what you are working toward.

Once you have your goals, try to determine the cost and timeline of each of those goals. Based on that information and your risk tolerance, you can come up with an investment strategy for each individual goal.

3. Learn the basics

When you first begin, investing can seem like a new language. There is a lot to learn when it comes to securities and financial markets—but don't be intimidated. Remember that every investor once started from where you are now. And people start in many different ways, from buying stocks and bonds, to contributing to a 401(k).

We suggest beginning with the basics and then working toward the more complicated topics. For example, it could be a good idea to learn the differences between stocks, mutual funds, and ETFs before diving into more complex topics such as asset allocation, diversification, and risk tolerance.

The more you know and understand about investing and financial markets, the better suited you can be to make educated investing decisions.

4. Don't worry about starting small

Regardless of the amount you are investing, putting your money in a position where it has growth potential can not only increase your wealth, but also help establish financial habits that can benefit you throughout your life. Plus, investing small amounts frequently can really add up over time. With mutual funds and ETFs, you can have diversification even when investing small amounts. And with fractional shares, you can invest in companies or ETFs based on how much you want to invest, not necessarily based on their share prices.

5. Don't be afraid to ask for help

With investing comes important decisions that may seem beyond your expertise. Don't be afraid to ask for help. Many investors use managed accounts to help with defining goals, understanding their current situation, and identifying key steps to move forward. Think of it as adding someone to your team.

Bottom Line

Investing can be a great way to grow your wealth over the long term, but it's important to approach it with a solid strategy. It's important to stay patient and disciplined, avoiding making investment decisions based on emotions or short-term market fluctuations. With the help of a financial advisor or financial planner, regularly monitoring and rebalancing your portfolio can help you stay on track and achieve your investment goals.

Sources

https://www.fool.com/ext-content/the-10-best-stocks-for-new-investors/

https://www.nerdwallet.com/article/investing/how-to-start-investing

Disclosures:

This site may contain links to articles or other information that may be on a third-party website. Advisory Services Network, LLC is not responsible for and does not control, adopt, or endorse any content contained on any third-party website.

This material is provided as a courtesy and for educational purposes only.  Please consult your investment professional, legal or tax advisor for specific information pertaining to your situation.

These are the views of the author, not the named Representative or Advisory Services Network, LLC, and should not be construed as investment advice. Neither the named Representative nor Advisory Services Network, LLC gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your Financial Advisor for further information.