Are you new to investing?
Or fairly new?
Do you want to learn more?
Well, we can help you get started with some investing basics. While investing your hard-earned money may seem daunting and complex at first, the good news is that building and managing your money has never been simpler for the DIY investor. Long gone are the days when you needed a broker to make trades for you. Today, with online trading and mobile apps, executing trades are just a seamless click or swipe away.
And, at Firstrade, our free commissions really make it easy to trade and build your investment portfolio.
So, let’s begin with some basic questions:
What’s my budget?
In other words, how much money do you want to invest? That’s a highly subjective decision that only you can make but understand that you can always start with a relatively small amount and then increase it as you make more money and your comfort level grows.
What are the basics?
At the very least, take some time to learn about the fundamentals. What’s the difference between an individual stock and a mutual fund? What’s an option? An exchange-traded fund? Go to our education page on our website for all the answers (link here)
What are my goals?
While all investors want to make money, every investor’s personal circumstances are different. What your particular goals are will help you decide how you invest. For instance, if you’re young and want to start growing your money to save your first home, you may want to invest more aggressively. If you’re older and worrying about building your retirement nest egg, tax-deferred investing may be your best route. Your age, your income, your family situation and your personal lifestyle will all be factors in determining your strategies and investment vehicles.
What’s my investing style?
How much of a risk taker are you? What level of risk makes you comfortable? What will keep you up at night?
Again, these are personal decisions that you must make to help you decide whether you are going to be a conservative or aggressive investor, or somewhere in between.
How do I choose my investments?
Once you’ve learned the basics, established your initial budget, developed your goals and figured out your risk tolerance, next you have to start choosing your investments, which will be based on how you answered the questions above. It will be equally important for you to understand the principle of diversification. You’ll want to avoid “putting all your eggs in one basket” by diversifying in different stocks, funds, asset classes and industries.
While there’s certainly so much more to discuss beyond these investing basics, we just wanted to give you some food for thought as you begin your investing journey. Firstrade has many tools and resources available to you to get your on your way to building your investment portfolio and beginning to secure your financial future.
For more details about getting started with Firstrade and to learn more, go to our website.