Finances

Start investing safely with these tips for beginners

on


This guide outlines the strategies you should follow as a beginner if you want to start investing.

When you start the journey of investing, there are many aspects to consider. The age of the internet and technological advancements ensures that many new innovative movements occur every day, and this is particularly the case when you start investing. 

New technology makes many things possible, like playing live dealer games at Casumo or opening up a new business avenue. These technological advancements mean many different investment options appear, with new opportunities popping up by the dozens. 

Tips to start investing

However, how do you know when is the right time to invest, and how do you start investing properly and safely? There are many factors to consider when you start to invest, but we set aside some general tips to keep in mind when you start investing. 

Setting up Your Account

When you start investing, we recommend you set up a Tax-Free Savings Account (TFSA), as it offers you an account where your interest, dividends, and withdrawals are free of any tax. This TFSA is perfect if you’re saving up for short-term goals and emergency funds. 

Research Your Investments

The best investors spend days and weeks researching possible investment opportunities before investing. Thorough research means you better understand how the market falls and rises and know what you’re investing in. This means you can see when investments gain a lot of attention, and it might be best not to invest in them. 

Many think it’s better to invest in the investments that gain the most attention, but that’s not always the case. Although we’re not saying to board a sinking ship, it might be better at times to invest in a market when the stock is reduced.

Retirement Plan 

It’s essential to keep your retirement in mind, although we wouldn’t state that as the be-all and end-all of investment. Maximize your contributions to your retirement plan, as you get free tax returns from the retirement plan benefits. Your retirement plan should be the plan you’re most aggressively invested in, as that’s your most extended-term investment. 

When you retire, don’t immediately live off your retirement investment. Instead, live off any other income or short-term investment you have. This allows your retirement investment to grow longer and save you in tax dollars.

Invest Diversely

Don’t place all your eggs in one basket when you start investing. Diversify your investments to ensure you’re covered in most areas. Investment stocks rise and fall; that’s part of the entire process. When your stocks are low, your investment in real estate might be faring better. Diversity ensures you can still cover yourself if one area or investment turns out to be a dud.

That being said, make sure you don’t start investing in too many different things to the point that you can’t keep track of them. The critical aspect of any investment is to keep an eye on it and do annual reviews of all your investments. If you’ve reached the point where you can’t manage to do the annual reviews, you’ve probably invested too much.

Minimize risks when you start investing

Just as there are tips to ensure you get the best out of your investments, there are also tips on what to avoid or look out for when you start investing.

Minimize Fees

While it’s not always possible to adjust management and commission fees, you should try and minimize fees where you can. The higher the costs you pay for this investment, the lower the possible returns on it. One way to do this can be to use a Robo advisor to keep track of your investments compared to a bank advisor. Not only is the management fee less, but bank advisors can only sell funds that are affiliated with their bank’s brand.

Think of the Long-Term Plan

The vital aspect of any investment is the commitment and patience you need when investing. This commitment means not bailing if things get tough and keeping hold of your investment despite others’ words. Commit to keeping your investment for at least five years, though a decade or more is better. 

Remember that all investments go through a dip, and instead of selling during that period, keep hold of them. Selling at a discounted rate is the worst decision you can make, as you don’t know what the future holds.

Consider your goals

When you start an investment, consider what you’re investing for. If you’re investing for a short-term goal, invest in safe investments you know will be fine for the next few years. If you’re investing for the long-term, invest in something you believe still has the potential to grow. 

This can result in your investment growing exponentially, especially if you invest in a wealth-building investment. Consider where the economy and market might be in a decade and invest in stocks you believe will have value at that time.

About Business Woman Media

Our women don’t want to settle for anything but the best. They understand that success is a journey involving personal growth, savvy optimism and the tenacity to be the best. We believe in pragmatism, having fun, hard-work and sharing inspiration. LinkedIn

Recommended for you