INVESTING 101 - TIPS TO GET YOU STARTED

You’ve been paying attention, now you know what’s out there in the markets. Before you begin setting up an account to start investing, here are some tips for you to better prepare you!





Set your goals


Have a purpose. Once you know what you’re investing for, you will arrive at the amount that you are targeting.


Your goals could be to:


  • accumulate enough funds for the downpayment of a new home.

  • saving for your child’s education

  • your own retirement


Finding out your goals will help in deciding how much funds you require and the time required to achieve it!


As a rule of thumb, you should put aside money that is required within a short time-frame in less risky investments and allocate money to higher-risk options when you need the funds after several years or more.


Your age


You’ve may have heard that older individuals should not put their money in high-risk avenues because for most older folks, your capacity to earn decreases as you become older.


For example,


  • a person who is retiring soon should shift most, if not all, of his funds to relatively risk-free investments(i.e Annuities unless they have lots of excess money. If you’re 70 years old with limited resources, it doesn’t make sense to park your life’s savings into stocks of just a new company.

  • However, for a young person just starting out on a career, putting a major portion of their savings into high-risk and high-return stocks could be a good investment strategy as time is on your side, and you can wait several years for your investments to give you the returns you seek.



Spend time to monitor your investments


You have to allocate some time to monitor your portfolio of investments

Time spent varies from person to person. (daily to a few hours a month)


This will enable you to rebalance your portfolio once you have made your desired return. It also allows you to cut your losses early if you have made an investment mistake previously.


For example, for a daytrader in the forex or stock markets - they’d be checking on their investments daily.


For an investor who has to work and has other responsibilities, they could check on their investments once a month if they’re invested into relatively stable investments.


Risk and return are directly proportional


The higher the risk in an investment, the greater is the possibility of earning more substantial returns, not a guarantee!


There is the probability of them losing part or all of their capital increases as well.


Each person has a different capacity to absorb losses. A working couple in their 30’s with young children and a 50-year old millionaire will have very different risk appetites.


-The couple would consider $100,000 to be a large amount.

-The millionaire could easily put it into a risky investment even a small chance of earning very high returns. The millionaire may even give it to someone as seed money to start a business.


Remember to diversify!


-It is unwise to put all your eggs in the same basket!


-If you have $10,000 to invest in stocks,

it is far better to put it in four or five companies rather than to use all the money to purchase the stock of a single company. Even better, spread the investment between companies in two or three industries.


-You can also do your dollar-cost averaging to reduce your risk!


In a nutshell,


If you’re looking to dip your feet into the markets, always map out your goals and strategies.


Take emotions out of your investments so you won’t do something rash and unwise.

Understand what you’re investing in and how it complements your other investments.




You are awesome so if you need help I'll be there for you! 🔥

If you'd like to start investing and want to engage a trusted advisor, book a discovery call with me so we can find out your goals and what's the most appropriate solution!



Disclaimer: All investments have their own risks, please do your due diligence before making any decisions.


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