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New Member
posted Oct 26, 2018 6:17:15 PM

How to start investing

I am just starting out and have a pretty decent credit score. I’m also starting save up some money but I like to plan ahead. What are a few things you guys would suggest to start investing? What should I look for?

2 28 26698
24 Replies
Level 15
Oct 26, 2018 7:21:08 PM

Rule #1 - Do not invest what you are not willing to lose

Rule #2 - Consider all monies invested as lost, permanently and forever, within the first minute of having made said investment

Rule #3 - Other investors do not give you tips for "your" benefit. They do so for their own benefit. It's the name of the game.

Generally I myself only invest for the long term. I don't "play the markets" because I'm not yet that rich, and probably never will be. I find three types of mutual funds to be right for me. I invest equally in growth funds, growth and income funds, and about 15-20% of invested funds into foreign markets. Make google your best friend, and do your homework to learn about this stuff. Don't rely on other's to "educate" you for your benefit. They're not going to.... but they will lie to you about it. That's why they're so successful at it.

Level 1
Nov 16, 2018 7:17:12 AM

Educate yourself. Asking questions is a great first start!

 

I think one of my favorite starter guides is "If You Can" https://www.etf.com/docs/IfYouCan.pdf

 

It is meaty, but full of sound advice that is focused on helping one person, and that's you!

 

Good luck!

Level 4
Nov 16, 2018 9:06:31 AM

I'm in a similar boat, not too familiar with investing, just saving. Would love to see some more ideas on where to start, and what to look out for from those who have been there!

Alumni
Nov 21, 2018 10:58:12 AM

I would agree with most of what has already been said, but let me add a bit of practical advice as well. As a first time small investor you should be investing in a broad range of equities across most economic sectors. The most practical and least costly way of doing that is to invest an an Exchange Traded Index fund (ETF), something like the and  S&P 500 index ETF or the total stock market ETF. For example, and only for example, SPDR S&P 500 ETF (SPY), or Vanguard S&P 500 ETF (VOO), or Vanguard Total Stock Market ETF (VTI), and similar products. Second, invest what you can afford to live without, but invest regularly (dollar cost average). Over time you will realize the benefits of the economy's growth, but there will be times when your investments depreciate. Just stick with it for the long run. If you have some money in the bank that you're not prepared to lose, but you'd like to earn some better interest on those funds, think of investing in Treasury bills. You can buy T-bills directly though a Treasury Direct account in amounts of a little as $1000, and it's simple to set up an account. Right now a 91-day T-bill is yielding about 2.4% and the investment is the safest in the world.  The Treasury site is: https://www.treasurydirect.gov/

 

Good luck

Intuit Alumni
Dec 15, 2018 9:29:21 PM

@_brian I'm a big fan of 401k's - at least for companies that offer them like Intuit, we've got a great plan with some great index funds with great matching. 

 

And the earlier a person starts, the better. I was a big Motley Fool person many years ago, and the graph on this page really spells it out for me: 

 

https://www.fool.com/knowledge-center/compound-interest.aspx

 

But, when I hear "I want to start investing", I always go to "investing for retirement". 🙂

Level 3
Feb 19, 2019 7:08:52 PM

I'd buy JL Collins' book "The Simple Guide to Investing." BEST BOOK I've ever read. Wish I'd seen it years ago.

It's basically a homage to the John Bogle method but simplified:

a) buy index funds that invest in the entire market ("why find try to find a needle in a haystack? buy the entire stack!")

b) make sure the funds are VERY LOW cost ones (below 0.1%) for their expense ratios... which is critical in the long run

c) determine your balance between stock and bond FUNDS (more stocks in your youth)

d) don't pick individual stocks (it's generally a losing game for most)

e) don't try to time the market (even experts can't do it)

THAT'S IT. Set it and significantly forget it (with only the occasion re-balancing of those ratios as you age).

The book is a terrific read.

 

[P.S. - of course I'm referring to RETIREMENT investing. If you have money you are willing to lose and want to just "play" - there are oodles of ways to go. But in the long-term good ETFs are best.]

New Member
Feb 25, 2019 8:36:17 PM

Send me in your direction I’m 45 And just getting interested didn’t think I ever would be able to

Level 1
Mar 8, 2019 9:31:34 AM

https://act.webull.com/i/AZPYBnFifYf1 This is a good app for learning to invest. It has paper trading for practice, and when you're ready you can give it a shot. I've recommended to several friends who are in the same situation and they've been enjoying the education.

New Member
Apr 5, 2019 6:01:28 AM

Invest?  meaning its money your willing to lose.... or save for your future? 

If you want to save money for your future. Put it in a matched 401K associated with your job. Contribute your max each year, especially if your workplace matches it. 

But dont stop there.... Open up a Roth IRA, protects your money for the future, much higher yield than putting it in a savings account, and with companies like Fidelity, you can start by putting in as little as 50 dollars a pay period.

By the time you ready to, send kids to college, retire... go on a kick ass vacation? whatever. Youll have the funds from your IRA without having to dip into you daily accounts. 

 

Good Luck!

Level 3
Apr 18, 2019 2:51:44 PM

Like many long-term endeavors, to succeed in investing you must “know thyself”

 

That is to say, the better you know yourself, your own temperament and risk tolerance, the better chance you have of succeeding,

 

A great way to determine your best long-term investment strategy is to take a short asset allocation/risk tolerance test at the following link: https://personal.vanguard.com/us/FundsInvQuestionnaire
This test will determine your optimal mix of stocks, bonds, and cash reserves.

 

If practical, consider a disciplined dollar cost average approach which involves contributing a fixed dollar amount at certain intervals such as investing once a month in a 401(k). This strategy will have the effect of buying more shares when the market is down and fewer shares when the market is more expensive which will keep your costs low. In addition, you will have the great advantage of keeping emotion out of your investing.

 

Wishing you all the best of good buys,
Marketstar

Level 1
May 6, 2019 6:36:42 AM

I honestly prefer long term savings plans. I was never very good at investing money off the bat. I reckon that there are a few funds that you could put your money into where the returns would be more balanced out, but decent way of growing your money. Anything would be better than just leaving it in the bank honestly. Make sure that you keep a decent amount of savings to cover any losses too!

Level 3
May 6, 2019 8:05:22 AM

I like your long-term asset allocation thinking- see the link in my above answer to get started.

 

Good luck,
Marketstar.

 

PS You can still get 2-2.5 % with an internet bank (ie. American Express) or money market fund-not great, but getting better.

Level 5
May 6, 2019 12:34:40 PM

Internet banks at these rates are a good place to park money or as part of an asset allocation strategy. Care should be taken not to use them as a long term investment alternative for all of one's net worth because over a long enough time frame, inflation will take a toll.  

Level 2
May 28, 2019 12:20:39 AM

Investing is a wide topic, I'm not sure which part are you interested in more. I concentrate on stocks and mutual funds study first, How to get started investing in stocks and mutual funds is one of my favorite starter guides. 

Level 2
Jun 10, 2019 1:28:01 PM

There are many investment instruments for you to choose from. The most popular include:

Stocks

  • A stock is a share of ownership in a company. Stock prices move based on investors’ evaluation of the company’s performance, including leadership changes, new product releases or how it’s doing financially.
  • Companies issue stock to the public to raise money to grow or pay off debt. Stocks are also known as equities.

Bonds

  • A bond is essentially a loan to a company or government entity, which agrees to pay you back in a certain number of years. In the meantime, you get interest.
  • Bonds generally are less risky than stocks because you know exactly when you’ll be paid back and how much you’ll earn.

Mutual funds

  • A mutual fund is a mix of investments managed by an individual company. When you invest, you don’t choose specific stocks or other securities; the mutual fund does it for you. The inherent diversification of mutual funds makes them generally less risky than individual stocks, but there are mutual funds available at all risk levels.
  • Popular mutual funds include index funds, which follow the performance of a particular stock market index, and money market funds, which invest in short-term, low-risk assets.

Exchange-Traded Funds (ETFs)

  • An ETF is a basket of securities — stocks, bonds, commodities or some combination of these — that you buy and sell through a broker. They combine the diversification benefits of mutual funds with the trading ease of stocks and are available at various risk levels.
  • Index funds are also common among ETFs — and they generally carry lower associated management fees than mutual funds.

 

Regards,

Adrian

Tax Consultant

Level 2
Jul 3, 2019 1:51:05 AM

You need to be willing to take a huge risk which is involved with investments. Be prepared to lose what you invest. Thus, only invest a certain amount that you are willing to part with. That is the first main factor to consider and the rest will fall into place.

Level 2
Jul 9, 2019 8:36:09 PM

Money doesn’t grow on trees, it can grow when save and invest wisely. Knowing how to secure financial well-being is one of the most important things never ever need in life. In this saving and investing brochure, will cover the basics on saving and investing. 

Level 1
Aug 19, 2019 5:16:28 AM

Everything you need to know starting out as a noob can be found here. https://www.investopedia.com/

 

If you plan on "Social Trading" sites as I refer to then such as stocktwits or social wall street and yahoo beware of "pumpers" #1 Rule. Trade YOUR style of trading and don't chase bc of FOMO. You trade the trend and what is moving.  Cut your losses quickly and let your winners run. Best of Luck!

 

New Member
Oct 1, 2019 3:35:56 AM

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Level 6
Dec 19, 2019 5:06:12 PM

Check out the organization American Association of Individual Investors (AAII). They are non-profit, unbiased, and impartial. Buy a 1-year subscription and you will learn things.

 

Beware of organizations like Motley Fool, who will make you pay for each bit of advice. They are in it for their own profit more than yours.

Level 3
Dec 24, 2019 10:05:56 AM

The following summary from the article “Investment Advice to a World Champ” by prominent investment analyst Dr. Steve Sjuggerud is not only great advice for beginners, but is also a good reminder to the more experienced:

 

1. Nobody will care more about your situation than you, so never hand off your finances completely.
2. There is no magic bullet or shortcut. (The "hot tip" doesn't exist.)
3. If you don't understand it, don't buy it. (If it sounds too good to be true, it probably is.)
4. Buy investments that are cheap, hated, and in the start of an uptrend.
That's it. Remember these points, and take control of your wealth.

 

Note: To help determine what is “cheap, hated, and the start of an uptrend” see bigcharts.com. Just type your ticker symbol in the upper left field, click “Draw Chart” and you will see past and current market direction.

 

Wishing you all the best of good buys,

Marketstar

 

Returning Member
Feb 12, 2020 8:56:43 PM

I would like help investing my tax refund.

Level 15
Feb 15, 2020 6:48:19 PM

1.  Have 3-6 months of living expenses in a savings or money market account. 
2.  Max out contributions to any employer retirement plan you have and start an IRA. 
3.  Determine your risk tolerance by using an asset allocation calculator you can find online from institutions like Vanguard and Fidelity. 
4. Based on what your allocation is, invest in low cost index stock and bond funds. 
5.  Rebalance your allocation when it varies by 5 percentage points so you will be forced to sell high and buy low. 
6. Ignore advice to make a quick killing in an investment you don’t understand 

7. Don’t buy an asset because a neighbor, friend, or relative told you how great it is. 

Level 2
Feb 19, 2020 3:02:08 PM

Hi Brian,

I have been wanting to build a stock portfolio for a while now, and I am going to start when taxes come. I have a few ideas about what i want to invest in such as the "new craze" cannabis companies that are established with a good portfolio and business plan, but not one of the big ones that have already are a fortune to invest in, but someone with great potential and in a state that supports their business, also my thinking is when marijuana gets passed in all 52 states and trust me it will, that stock will provide a huge return! It isnt going to happen yet, but many states little by little will eventually come around because the money their state will benefit from, and they will join the ranks...also I am looking for businesses that are just starting out, online shopping is big...but you must research research research! Do your homework...afterall its your money depending on your smart moves 🙂 hope this helps..