It is not possible to learn about investing in a single day, but you only need the basics to begin a successful investing career. Even if you are just starting out, put solid financial goals in place. You will reap the rewards.
Remember that fortune favors the bold! What type of financial plan do you have put in place for your financial future?
You make money working, but are you considering sending your money to work for you? Investing can be defined as having your money work for you by diligently saving and committing a percentage of your finances to a brokerage account to earn returns and solidify your financial future
What Is Investing & How Can It Help Me?
Investing is trading your money today so that it can make a difference to your tomorrow. Investing revolves around the stock market, and while there is always some level of risk involved, the opportunity is out there to try and improve your financial situation. A successful investment portfolio is one way to attain this.
Obtaining investment advice and education from a financial professional can set you on a path to your financial wellness. Get relevant investment advice from a professional financial advisor to set you on the right path.
Risk and Opportunity
The # 1 takeaway for beginner investors
To begin with, risk tolerance and opportunity are some of the most basic principles of investing.
Risk tolerance, as a concept, is a determined value (often dependent upon a person’s age and/or financial situation) of how risky an investor can be in chasing their goal returns.
Because the stock market is always fluctuating, opportunity in investment is all about timing. When it’s a good time to buy or sell, and how the state of the world is affecting the economy. Taking a calculated risk can pay off, but the timing of that undertaking is just as important as the plan itself.
Beginner investors need to weigh the risks of investment options. They need to ask themselves how much risk they will take with their financial decisions. This is in return for certain amounts of profit. As profits climb, risk levels also rise.
An investment that has a low return on investment (ROI) offers greater security and is typically less risky than an investment intended to have a high rate of return.
What Investment Goals Do You Wish To Achieve?
Why are you making certain investment choices?
What are your personal investment goals?
There are two important questions you need to ask yourself when starting on your investment journey.
What are your future goals? Is it earning second sources of income, or is it perhaps to reach retirement goals? Investment choices and money goals will differ depending on your individual goals.
How Do You Make Your Investing Decisions?
Beginner investors fall into two categories: There are those that use fundamentals for investing, and those that use technology to make their investing decisions.
What is fundamental analysis?
Fundamental analysis uses data and reports to make investing decisions. One of these is the NFP report (Non-Farm Payroll) in the US. We view the NFP as an important indicator of the health of the economy.
Investors also use other major economic reports, such as the Producer Price Index (PPI) and Gross Domestic Product (GDP). Fundamental stock investors evaluate stocks based on a company’s financial statements and earnings reports.
What is technical analysis?
Then there are those investors that use technology to make investing decisions. Technical analysis evaluates investments based on price and trading markets. It also makes use of price charts, patterns, and technical indicators, and determines market activity (such as trading volume). This is to help predict future price movements.
Day traders are short-term traders. They often favor technical analysis. Long-term investors prefer using economic fundamentals for investing. There are, however, some investors that make use of both.
Investing Regularly Is Important
Investing small amounts regularly could become a sizeable financial safety net as you reach retirement. You can multiply a modest investment in a matter of years if the investment provides a steady annual ROI.
Add a nominal amount to the investment every month, and your money grows even more.
ETFs and Novice Investors
Exchange-Traded Funds are gaining popularity amongst novice investors. They make use of the combined investment capital of investors and have an advantage over mutual funds, which are often more expensive to run for both the active fund managers and the investors.
ETFs are bought and sold anytime during trading hours. Similar to how individual stocks are traded. Mutual fund shares are traded even after the close of trading hours. This allows more flexibility in timing your investment trades, which can make all the difference in the control you have over your investments and their level of return.
ETFs offer lower fees than mutual funds. The lower trading costs result in enhanced net profits. ETFs are versatile investment securities that are invested in any type of asset class (a grouping of asset types that function similarly to each other in the stock market).
Educating Yourself On Investment Pays Off!
Investors are not born, they are made. Investing is a skill one learns: half art, half science, and there is much to be learned.
Making a commitment to expanding your financial education about investments could be a great way to fund your future. When deciding where to put your money, always do your research on the specific financial move you are about to make. Properly tilling your soil gives the best chance for it to bear fruit.
Saddock Wealth Can Help with Your Financial Questions!
Nothing in life affects us as much as our wealth. Are you giving your personal finances the attention it needs? As a beginner investor, Saddock Wealth offers professional advice. We create an action plan by tackling the financial planning process for beginning investors as you start your investment journey.
We are financial professionals with years of experience under our belts, and we are here to help you gain financial independence. Our team of professionals will show you how to grow your wealth.
Contact us today to schedule that all-important meeting to unpack the best investment opportunities in 2022.