The Basics of Investing

The best way to invest your money is whichever way works best for you.

To figure that out, you’ll want to consider:

  • How much money you have to invest.

  • How much time you have to invest it.

  • How comfortable you are taking risks.

For example, a young professional with a higher risk tolerance might choose to invest in the stock market, while someone else might want to start with more conservative investments before moving into stocks down the road. So how do you decide which way is right for you?





First, we recommend consulting a financial advisor who can help get an idea of where your money should go based on your individual needs and goals.



But here are some basic guidelines to help get you started: If you're looking for an easy way to invest $10, $20 or $50, Robinhood is another great option for first-time investors. It's a mobile app that lets people buy and sell stocks in public companies without paying commission fees. And since it's an online broker, there are no minimum deposit requirements either -- just download the app and start investing today! You can open an account by entering some basic information about yourself and linking up your bank account or credit card (or both).





From there, it's easy to start buying shares of stock on Robinhood from the comfort of your couch or anywhere that has cellular service or Wi-Fi access.


No matter what kind of investor you are, there's probably a low-cost ETF that fits your needs. ETFs are passive investments that track indexes like the S&P 500 or Nasdaq and hold hundreds or thousands of stocks within them at a low cost and with minimal work on your part -- they're perfect for beginners who want exposure to various industries but aren't ready (or don't have time) to manage their own portfolio of individual stocks. If this sounds like it could be right for you, here are some great options: The SPDR S&P 500 ETF (NYSEMKT:SPY) allows investors exposure to many top companies within the S&P 500 Index at a reasonable price ($0. 0025 per share).





For those who want even greater exposure within the same index but at even lower costs ($11 per year), Vanguard offers its version -- the Vanguard S&P 500 ETF (NYSEMKT:VOO).


If you're looking for something more specific -- say technology companies instead of just "large-cap" businesses -- then check out some sector ETFs like these three: With over 1,000 different options available through brokers like TD Ameritrade, Charles Schwab and E*TRADE Financial Corp., investing in individual stocks can be an exciting way for new investors to build wealth over time -- but it's also risky if they make investment mistakes along the way.





That being said, new investors might want to start off by choosing relatively stable businesses before trying their hand at picking winners with volatile price movements that could result in heavy losses quickly if things go sour. If you're interested in learning about the basics of investing in individual stocks, here are some great options: The first step to investing is to set up an account and determine where you will hold your money. For most people, this means choosing between a savings account at a bank or a brokerage account.


Savings accounts earn a small amount of interest, but won't provide much growth on your money over time. On the other hand, brokerage accounts can help you grow your money faster by investing in the stock market -- but there are fees attached to every transaction.

Some banks may also charge fees for certain services like depositing checks or using ATMs as well.



Here's how to determine which method is best for you: If you're not sure what type of account would be best for you, here are some general rules of thumb: First things first, most people should contribute to their 401(k) plan offered by their employer if they have one available and take advantage of it if they can afford it because it's tax-deferred and often comes with matching contributions from their employer as well -- free money! (And even if they don't match, there's an incentive to contribute all the same.) Many employers even allow employees to enroll in their 401(k)s automatically so they don't even have to think about it -- making saving easy!



While this isn't necessarily true for everyone since every retirement plan has different rules regarding withdrawals and penalties, it's something worth checking into so that you don't end up losing out on valuable savings opportunities should your life take an unexpected turn. You can set up an automatic withdrawal from your checking account or fund your Roth IRA through direct deposit from work or transfer funds from another existing financial institution (like a brokerage).



After that point, all that's left is choosing where -- and how much -- to invest based on what makes sense for your specific situation: You'll want to consider risk tolerance (the amount of risk/volatility someone is willing/able to handle), time horizon (the length of time someone has until retirement), income needs (the amount someone needs when they retire) and investment goals (what it is they want this money invested toward).


Investing $500 per month into the stock market might seem like a lot until you consider that over 30 years with compounding interest alone, those investments could turn into more than $200K! Of course, those numbers depend on many factors like how much return each investment earns and how long each person keeps their investments before cashing out; but the point remains that starting early can help give new investors a fighting chance against volatility while increasing their chances of achieving investment success over time as well.


And while saving $500 per month may be just enough for an average person with no extra cash flow who wants to invest in stocks via an online broker like E*TRADE or TD Ameritrade, it might not be feasible for someone who is struggling financially due to high expenses (like car payments, student loans or rent). In those situations, it may make more sense to start with something a bit more conservative like a savings account or CDs. If you want to grow your money faster but still don't have much cash on hand, there are some great low-cost investment vehicles available that can help you reach your goals.


Once you've chosen the best investment vehicle for your situation, the next step is to set up your account and fund it with some cash. And then all that's left is waiting for your investments to grow and watching that money work for you!

Past performance is not a guarantee nor a reliable indicator of future results. The content contained herein is provided for informational purposes only, does not constitute investment advice or recommendation per se, does not take into account your particular investment objectives, financial situation, or means therefore it should not be relied upon when making investment decisions nor acted upon without obtaining specific professional advice directed specifically toward your circumstances from a qualified advisor licensed in your state who specializes in investments along with other sources deemed reliable but we do NOT verify accuracy so please confirm all data before relying on it.


The opinions expressed in the Blog are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product. It is only intended to provide education about the financial industry. The views reflected in the commentary are subject to change at any time without notice.

Nothing on this Blog constitutes investment advice, performance data or any recommendation that any security, portfolio of securities, investment product, transaction or investment strategy is suitable for any specific person. From reading this Blog we cannot assess anything about your personal circumstances, your finances, or your goals and objectives, all of which are unique to you, so any opinions or information contained on this Blog are just that – an opinion or information. You should not use this Blog to make financial decisions and we highly recommended you seek professional advice from someone who is authorized to provide investment advice.


Any indices referenced for comparison are unmanaged and cannot be invested into directly. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.


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