Beginning your investment journey
You're ready to begin investing. Great! But with all the options available, how do you know what's best for you?
We know it can be overwhelming, so here are a few things to consider as you begin.
Set Clear Financial Goals:
- Determine what you're investing for: Are you saving for retirement, a down payment on a house, your children's education, or something else?
- Establish a timeline: When will you need the money? This will influence your investment strategy.
- Calculate how much you need: Estimate how much money you'll need to achieve your goals.
Assess Your Risk Tolerance:
- Understand your comfort level with risk: How would you feel if your investments lost value in the short term?
- Consider your time horizon: Generally, if you have a longer time horizon, you can afford to take on more risk.
Choose an Investment Account:
Generally (but not always), we recommend people start with a 401k, and add an IRA once they are contributing enough to earn the employer match on the 401k contributions.
- 401(k)s: Offered through employers, often with employer matching contributions.
- IRAs: Individual Retirement Accounts, including Traditional and Roth IRAs.
Start with Small Amounts:
- You don't need a lot of money to begin: Many account types have no or low minimums.
- Consider dollar-cost averaging: Invest a fixed amount regularly, regardless of market fluctuations.
Pick an Investment Strategy:
- Diversification: Spread your investments across different asset classes to reduce risk.
- Long-term investing: Focus on long-term growth rather than trying to time the market.
- Index funds: Track a specific market index, providing broad market exposure at low cost.
- You may even be able to select funds within an employer-sponsored plan. Contact your plan administrator, or us, for help making those choices.
Work with a Professional and Keep Learning:
- Seek professional advice: Consider consulting a financial advisor for personalized guidance.
- Educate yourself: Read books, articles, and websites about investing.
- Stay informed: Keep up with market news and trends.
No matter what type of fund you choose, starting early means your money has more time for potential growth. The growth does take time though, so stay patient even through market fluctuations. Stick to your plan, and remember you are welcome to reach out to us any time for questions or concerns regarding your accounts with us.
This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal.
