How to start investing

[Needurwisdompls1]

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?

[Carl]

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.

[dsjohns]

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!

[_brian]

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!

[DJS]

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

[lwdupont]

@_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". 🙂

[ThickAsABrick]

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.]

[Ashley27]

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

[Geerts83]

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.

[ANSWERS2]

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!

[marketstar99]

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

[N_Davidson]

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!

[marketstar99]

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.

[halpalms]

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.  

[jeffguarino]

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.