So you have finally attained financial sufficiency. You’re probably in your late twenties and you are currently enjoying the benefits of having a disposable income. Perhaps you’re in your late forties. All your children have moved out and suddenly you no longer have any dependants. You also no longer have any pressing financial obligations and have managed to put all aspects of your finances under control i.e. debts, savings and budgeting. This state of affairs leaves room for a very inviting endeavor and that is making investments. For many beginners, taking the first step us usually the most difficult part of the process. This situation is made worse in scenarios where the individual isn’t well informed and therefore prone to making unwise decisions. The following is list of tips every beginner should consider abiding by.
It’s never too early to start investing
The ultimate beginners guide to making good investments wouldn’t be complete without first making it clear that it’s never too early to start investing. As long as all your financial bases are covered then you’re good to go. The biggest argument for starting your starting your investment journey is simple. The earlier you begin the more money you’ll make in the long run. The odds of a 50 year old first-time investor making more money than a 25 year old first-time investor during his/her lifetime are rather low. Start young and you’ll have more prosperous years.
Knowledge is power
Never underestimate the importance of wise counsel from someone with more experience than you. They have walked down the path you’re about to embark on and have made the same mistakes you will inevitably make. Having them on your side will help you avoid these mistakes. Take the time to consult your bank’s investment advisor regarding all the options at your disposal. Speak to individuals who have been in the business for years and know all the classic rookie mistakes. These interactions will provide you with the necessary information and insight to execute your vision.
Begin with what’s most familiar to you
It’s always better to begin by investing in something you know well and can easily vouch for. Making such moves will enable you to quickly transition from dipping your toes in the water to taking a confident plunge. If you choose to invest in stocks, your passion for Apple products might push you to invest in Apple stocks. If you are a big fan of MacDonald’s then that’s probably where you should begin. However, if you have bigger goals with your money that go beyond getting a feel of the investment sector you should seek some consultation.
Diversify as much as possible
Most beginners tend to be young individuals who more often than not, don’t possess the bulk of assets required to develop such a robust diversified portfolio. This is what makes mutual funds such an attractive option. In the simplest terms, Mutual funds come about when a number of investors bring together their money which is afterwards put under the stewardship of a mutual fund manager who makes all the important decisions regarding how best to invest this money. Individuals can also invest in a CFD (contract for difference) which carries a host of benefits for the investor. One can learn more about CFDs by working with a company that offers them e.g. CMC Markets.
Work with an investment company with a proven track record
There are plenty of investment companies out there that are more than willing to begin working with you but you need to ask yourself a number of questions before giving them custody over your money.
- Do they have a proven history of success?
- Have there been any complaints lodged against the practices of the company? Are there any pending cases in court?
- Do they understand the goals you have and do they possess the ability to deliver?
These questions will enable you to easily narrow down to the best investment company for you. An example of a highly rated investment company is LPL financial which posted a net profit of 42 million dollars for its fourth quarter ended December 2016. This represents an increase of 0.46 % per share.