Many people do not have anything saved for retirement and they have no plans to invest for that time in their lives. Nearly one in five people who are getting close to the age when they will retire have absolutely no money saved. Of people between the ages of 19 and 29, about 41% do not think at all about what they will do about planning for retirement. Given that 10,000 people retire every day, making time to think about saving for it makes a lot of sense. Many people think they are too young or inexperienced to make any financial investment but that is not true.
Financial Investment Tips for the Novice Investor:
- Know how much risk you can tolerate. Not everyone can handle the same amount of risk. This is not just a financial investment you make, remember, investing in the stock market can be very stressful for a lot of people. When thinking about what kind of risk you can handle, you need to consider the financial implications but also the psychological implications. This is not just about how you deal with stress that comes with investing money but your general outlook on life.
- Avoid getting emotional. You need to be very logical in all of your decision making regarding making solid decisions on very financial investment you make. Whether your stock does the way you expect or not, you need to be able to keep your emotions in check and not allow them to influence your decision making process. Get the right expert advice and be realistic about what you can and should expect from your investments.
- Think long term. Do not live and die by how the Dow Jones does every day. Make your investments thinking about how your stocks are doing is a recipe for disaster. When you make a financial investment, think about what you are trying to accomplish. If you need to know when you are going to need the money you are investing. If you are closer to retirement, you will need a very different strategy than if you are just graduating college. While it is never too late or too early to invest for your retirement, you still need to devise a different strategy to best meet your needs. Many firms can provide you will a retirement calculator that can help you plan your best investment strategy. Once you have drafted one, stick with it.
- Study up on the market. You may not know a lot about the stock market when you start thinking about making a financial investment but that does not mean that you cannot learn. Familiarize yourself with the terms used and the different kinds of investment options. You should seek out experts but you will do yourself a lot of good if you can talk intelligently about the subject when you talk to them. At the very least, you will understand better what advice they give you.
- Do research into the firm whose advice you want. When you trust an investment firm with your money, you are taking a big risk. You can reduce your risk by looking into any company you want to help you with your advice. What is their track record? How much experience do they have investing portfolios that are similar to yours? Do they have much experience working with people in similar situations to yours? Ask your friends and family who they trust (or do not trust) for their investments? You can get a lot of information on the internet. If you check reviews, remember that people are about twice as likely to leave negative reviews than positive ones so one or two bad reviews should not overly color your opinion about a firm.
- Do not put all your eggs in one basket. You have probably heard that saying and it is very true here. Your portfolio should be very diverse. This will help protect you from too big of a loss should one (or more) financial investment do really poorly.
You do not have to be an expert financial planner or need someone to heck with wealth management to get something from investing in the stock market. Just use common sense and do your research and you can be surprised by what you accomplish.