3 Tips and Strategies for First-Time Investors

by Alex Feldman

March 22, 2018

After thinking about it for some time, you are ready to take the plunge into the world of investing. You like the idea of purchasing stocks in some of the companies that you already frequent and you are interested in opening an investment account at your bank.

In order to make your dip into the investment pool as positive as possible, it’s important to keep some key strategies in mind:

1. Make it Easy to Check Your Stocks

The first time you buy stocks, you will probably be tempted to check your portfolio frequently to see how they are doing. While you don’t necessarily want to check your Starbucks stock 10 times in one day, it is a good idea to have a quick and easy way to glance at your holdings, especially when you are getting started and you are super excited about them.

To make this as easy as possible, consider investing in a smartphone that has a built in stocks app. For example, the iPhone 7 comes with the Stocks app right on the home screen. Thanks to the iPhone 7’s 4.7 inch retina HD display, it will be easy for you to do a quick check of the stock market and your own stocks. You can add your own stocks, funds and other investment accounts to the app so that when you tap on the thumbnail, it will bring up the latest prices for the stocks that you actually own.

2. Approach ‘Hot Tips’ Prudently

Your neighbor who loves to play the stock market may tell you about a stock that she thinks is about to take off, or you might find something on the internet about a fund that looks like it will be the next big thing. As Go Banking Rates notes, it is best to err on the side of financial caution and avoid impulse buying. While these tips can sometimes have merit, it is wise not to chase after every single one of them, constantly changing your portfolio to buy and sell.

When you are investing for the first time, it is probably better to control your emotions and consult with a financial adviser on the best stocks and investment funds for your needs. Also, keep in mind that solid stocks that grow slowly and steadily can be a much safer investment than something really uncertain that ends up crashing.

3. Don’t Put All Your Investment Eggs in One Basket

As an investor newbie, it’s best to diversify your investments a bit to avoid long-term risk. Instead of buying one or two types of stock from one industry, choose stocks from a variety of companies. This way, if a couple of the companies do really well during the year, two others are pretty meh and the fifth stays steady, you will still end up being ahead after 12 months — far more than if you invested in one company that tanked in value.

In addition to stocks, you can also look into other forms of investments. For example, investment funds may have a solid history of modest but reliable growth, and bonds carry little risk but still allow you to get your investor feet wet.

While investing carries an inherent amount of risk, you don’t have to take on a lot to get going as an investor. By avoiding most ‘sure thing’ tips and focusing on conservative stocks that have a history of good performance, diversifying your accounts and finding an easy way to keep tabs on your portfolio, your investment account will hopefully begin to grow and give you some financial peace of mind.