Skip to main content

Simple Investment Strategies For Beginners

Investing is confusing and, when it comes to your retirement funds, there is a lot at stake.

You may think the process of investing requires you to pick out your stocks individually and consistently tracking their performance, with a lot of complicated buying and selling. This is, quite frankly, rarely the case. There are relatively simple strategies for investing and ways to set up your investments.

The good news is that building wealth and beginning investing really isn’t all that difficult. In fact, you can get started on your investment plan easily. All you need to do is think like a financial adviser.

Of course, you should also still hire a financial adviser to make sure your money is performing well and to see you through any potentially difficult times or economic downturns. However, we’ve got some tips to get you started in your investment strategies. 

Simple investing for beginners: Opening an investment account

You obviously can’t begin investing until you’ve opened an investment account. A financial adviser can help you figure out if  Traditional IRA, a Roth IRA or your employer-sponsored 401(k) accounts are the best options for your unique retirement needs and goals.

Once you’ve chosen an investment account, you can begin choosing which stocks are best for investing.

Stock investment strategies for beginners

Small investors need to try to match the performance of the stock market. Instead of trying to beat it.

For a new investor, this means the best simple strategy for investing is one: pick a few funds that mimic the behavior of the market and leave them alone. You read that right: leave them alone. For a decent amount of time.

You see, the stock market averages roughly 7{bc669dfb3651bb8509a96034cbe7494d3a811fc0eedf0ddccb239fb9cb737439} annual return. You can easily discern a performance pattern by looking at the past 20-30 years of how the market has done. This will also allow you to easily see which stocks are comparable in performance. Once you’ve chosen these stocks, let me sit and accrue wealth.

Now, doing your research and choosing the stocks is not going to be the most exciting job; however, sitting down with a financial advisor can make choosing the stocks easier for you.

You can’t entirely neglect your stocks once you’ve chosen them – you will most likely need to periodically check on them to make sure they are performing well; however, this investment option is incredibly low maintenance.

Stocks and bonds strategy for your portfolio

Society’s market is not only based upon stocks. Therefore, it is pertinent that your investment strategies reflect the market at hand.

For a stronger portfolio, you should choose a few different types of investments. This is where bonds come into play. You may be wondering how much of your portfolio you should dedicate to stocks and bonds. The best way to determine this is to meet with an expert who can help you assess your risk tolerance and your goals, as well as how much you’ve saved.

Index funds are excellent tools for beginning investors. These funds combine stocks and bonds that mimic a portion of the market. Index funds also have low fees and, because they match the market, they yield a higher return over time. Remember that not all index funds are created equally. As a result, you want to make sure you are getting expert advice on which fund is right for you.

You need to prepared to update your portfolio accordingly. The risk tolerance you and your adviser determined for your current asset allocation will not be the same as it will be in a few years. You want to periodically make sure you are carefully going over your investment strategy and updating it accordingly.

No need for complications while investing

Participants are confused at the beginning. However, with the help of an expert and a little understand how the market works, you can choose an investment strategy that requires very little upkeep.

The number one problem investors and retirees encounter when embarking on their savings plan is lack of knowledge. There are plenty of resources available to you to help you with your retirement portfolio. If you haven’t started investing because you weren’t sure where to start. Take as an advantage this article and use it as a guideline to help you begin preparing to invest in your future.

As with any financial decision, retirement investing should be carefully thought out and it often helps to speak to an expert. Make sure you are reviewing your portfolio with someone who takes the time to explain not only your current investment strategy, but how it will impact your future.