Have you been bitten by the investing bug? Do you want to get started in buying and selling stocks? Spurred on by the events surrounding the GameStop stocks, many Millennials and Gen Z are increasingly interested in managing their own financial future and investments but don’t know where to begin or how to invest smartly and lucratively. Two anonymous experts shared their investing tips and tricks. You can invest safely and profitably while still having fun!
10 top investing tips
1. Save consistently, save early. Time is your most valuable asset since returns on investments compound over time. The more you save now, the more your money multiplies over time.
2. Learn everything you can to make informed decisions. Information on investing is available in books, the internet, from brokerage firms and wealth managers and from any buddies or relatives you have in financial services. Know what you are investing in and the max you can make or lose. Take responsibility for your investing decisions — it’s your money.
3. When getting fancier with investing, learn about fundamental vs technical analysis.
4. Clarify your risk appetite and goals, and plan accordingly. Are you in your 20s, no planned large expenditures, and OK with losing a significant proportion of your savings for a chance of an outsized return? If so, equities may be more fun for you than fixed income. If alternatively, you are saving for a home purchase in the next few years or planning retirement, then diversification and investments that offer stable returns may be more important in order to prevent large losses that eat into your savings.
5. Vanguard ETFs are the easiest, safest way to make money consistently over time.
6. Just buy a fixed amount of stocks (usually in a mutual fund or ETF for consistent fixed payments) every month regardless of market movements. Over time, this will win.
7. Buy and hold. You will not win at day trading, and day trading is a good way to get your face ripped off. The more frequently you trade, the more commissions brokers collect from you. That said, if Vegas is more fun to you than doubling your money over 10 years with steady returns, have fun.
8. Check your emotions. We behave irrationally when we are scared or excited, so if the market swings up or down in a day, take a deep breath and remember this is one tiny sliver of a life-long game.
9. Make an investing plan, and stick with it.
10. Avoid derivative markets like options unless you’ve done a lot of research and are fully aware of how fast leveraged positions get called so that you don’t lose all your money in a heartbeat.
With an increasingly precarious future, cultivating future financial stability is important for today’s generations. These 10 tips should clear some of the obfuscating clouds surrounding investing, enabling you to start making informed choices and having fun securing your own financial present and future!