NMSS RIBasic investing: where to start?
Basic investing: where to start
It is important to invest your money, it is the only way it is going to grow. Without any investments it is very unlikely that you are going to be able to afford to retire. It is not all that hard to learn the basics of investing, although some people will make it seem like rocket science. Once you know where to start the rest becomes fairly straightforward.
The first thing that you are going to have to do when you decide to start investing is to decide which investments are best for you. This means that you are going to have to learn about your options and the advantages and disadvantages of each. This could include things like bonds, stocks, commodities and currencies. While most people will invest in more than one in order to diversify their portfolio there are very few people who will invest in all of them. You will have to put some thought into this to decide which are the best for your needs.
As part of the process of determining which investments are best for you it will be necessary to determine just how much risk you are prepared to take. In general the more risk the higher the reward, however that does not mean that you should run out and put your money into high risk investments. You need to think about things like your age and how soon you will need the money, the longer before you need the money the more risk you can take. You also have to realistically assess how comfortable you are with risk, don't take on more than you are comfortable dealing with.
The next thing that you will have to do if you are going to start investing is to learn how to evaluate investments. In large part this is going to depend on the type of investment that you are making. Choosing a good currency trade is very different than choosing a good stock trade. You will have to learn which information is important and where to find it. You will also have to decide which investment strategy you are going to follow, there are lots that you can choose from.
The last thing that you are going to have to do in order to start investing is to find a broker. This is pretty easy to do these days since there are now so many of them offering online services. You will want to find one that is easy to use and has low fees. The fees that you have to pay your broker will have a huge impact on how profitable you are as a trader. Therefore it is almost always best to stick to a discount broker. In reality there is little advantage to paying the extra fees for a full service brokerage.