7 Tips for Investing in Today’s Market
Jumping into a nine-year-old bull market can feel overwhelming and you may question whether you’ve already missed the boat. Recent market volatility might also make you a bit anxious. Yet, despite what you might have heard about unstable financial markets, it’s important to consider the stock market in the long-term as opposed to focusing on the daily ups and downs.
And even if the market continues its rollercoaster ride, or takes a slight dip, as long as you’re investing money for the long haul, your account is likely to grow thanks to the power of compound interest.
So what are you waiting for? The sooner you start investing, the sooner you take a great first step in planning for the future. Here are seven investment tips for beginners on how to invest your money wisely in today’s conditions.
Start Now, Start Small
The sooner you begin to invest, the longer you can keep your money invested, the more of a chance it has to grow over time. The sooner you can put away $100 a month, the more time you can give that $100 to grow. And that becomes more money for retirement. You’re not just earning interest on the money you invest; you also have the chance to earn interest on your money’s earnings, and this has the potential to increase your return on investment.
Focus on Investing, Not Picking Stocks
Don’t get caught up assuming you have to know how to pick stocks if you want to invest. In fact, an important investment tip for beginners is if you’re not comfortable picking individual stocks, you might be better off working with a wealth advisor who can help. Then you don’t have to stress about your investments or become prey to knee jerk decisions each time there’s a hiccup in the market.
Diversify, Diversify, Diversify
A diversified portfolio means you’re investing in more than just one investment type. To invest your money wisely, you’ll also want to consider putting your money into stocks, bonds, mutual funds, and private equity funds. Again, this is something a wealth advisor can help with. A mix of investments can help you feel less anxious when the Dow and S&P 500 take a dip.
Have Long-term Goals
What do you want to use your money for? You might be saving for retirement or to send your children to college. Or perhaps you’re saving up to buy a house. The key is to come up with long-term financial goals for the money you’re investing. And the timeline of when you want to use your money will help inform what kind of account you need. For the novice investor looking to grow their money long term, SoFi Invest might be a good fit.
Understand Your Risk Tolerance
Take stock of what keeps you up at night. If you’re going to lose sleep every time the market takes a slight tumble, talk with your wealth advisor. Keep in mind that as a young investor, it may make sense to take on more risk because your investments will likely have plenty of time to recover from any financial storms.
In fact, some advisors suggest loading up on as much risk as you can tolerate in your 20s and early 30s and then shifting to less risky investments when you get closer to 40. Just remember that it’s your money and you’re in control of it—an advisor will work with your risk tolerance, no matter how bold or how conservative.
Talk with an Advisor
If you’re unsure of what’s the right risk for you or how to invest, be sure to speak with a wealth advisor who can work with you in person, over the phone, or via Skype to determine your specific needs and long-term investing goals. This advisor will work hand-in-hand with you to recommend a portfolio of investments and help you reach your financial goals whether that’s saving for retirement, higher education, a new home, or all of the above.
Opt for the Lowest Possible Fees
Investment and advisor fees can cut into your earnings. However, there are a growing number of options that have limited fee structures, or even zero management fees all together.
With a SoFi Invest account, you can start online investing with as little as $1 per month. You’ll have access to a team of financial advisors who can work with you to come up with a personalized investment plan. Our advisors will suggest a curated portfolio based on your age, income, and assets. They can also track that portfolio f and adjust it as needed.
SoFi can’t guarantee future financial performance.
Diversification can help reduce some investment risk. It cannot guarantee profit.
SoFi doesn’t provide tax or legal advice. Individual circumstances are unique. Consult with a qualified tax advisor or attorney.
This information isn’t financial advice. Investment decisions should be based on specific financial needs, goals and risk appetite.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Advisory services offered through SoFi Wealth, LLC, a registered investment advisor.
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