How to Get Started Investing: Establishing An Investment Strategy

One thing that can safely be said about investing either online investing or investing with a broker or brokerage is that you don’t have to be a millionaire, or inherit some huge sum of money to get started. You would be pleasantly surprised how investing with little money can amount to a decent retirement saving over the long haul as long as you start early and you have a plan that is tailored to an investment strategy that makes sense for your financial situation.

The primary reason that people procrastinate about investing (or saving for that matter) is because they feel that they do not have the money to stash away for just in case thinking they might need it down the line. Most individuals would be amazed at just how little money we actually need each month. Before you get started investing though, you just have to remember a few significant aspects about getting involved in the stock market.

First and foremost, never invest more than you can afford to lose. Additionally, you never want to use your day-to-day living money which enables you to maintain your current quality of life. Just remember that sometimes, common sense mandates walking away from what you think may be a viable opportunity if it might ultimately spell financial disaster for you and your family in the long run. Educate yourself first if you have no experience investing. I know I just made half of your cringe, but when it comes to investing there really is no better way to keep your money safe than to simply just do your homework. I know, I know we all want a hot stock tip that will make us rich for the rest of our lives but for most of us this will never happen. A critical rule of thumb is to trust no one until you have done your homework. Rely on your true instincts and intuition before you ever invest your hard earned cash.

Establish an Investment Strategy

I’m often asked for an investment strategy for beginners who have never invested so much as a dollar in the stock market. Well there is no one right investment strategy for everyone because it really all depends on you and your financial situation, risk factors, how close to retirement you are, etc. There are a number of approaches you can take where how to get started investing online is concerned. The following 3 steps will hopefully help you get started on the right path:

Establish your investment strategy – forget about getting rich overnight. That’s just not going to happen most of the time, especially if you are going to rely on investments for survival. The element of risk is extremely high with many investment vehicles so you need to remember what was discussed above about never investing more money than what you can afford to lose. Just like planning a budget – you need to develop an investment strategy and stick with it for the long term. Long term investment strategies are the only way to go in the stock market, if you’re looking to get rich quick buy a lotto ticket.

Set aside money specifically for investing – Most of us hate saving money, and believe me I’m no different, but I find that when I have money in my pocket I spend it and when I don’t I don’t spend it. If you can set aside money for investing every month or every paycheck do so, if you can’t trust yourself get it direct deposited in an account for investing only. I would recommend against borrowing money from family and especially against borrowing from a credit card. Understanding where your money is coming from is critical for your investment strategy, without it you can’t make any investment income right? What’s critical here is that you consider what amount of money your budget will bear and keep that investment money separate from your living money so you don’t spend it on something frivolous.

Monitor and manage your investments – this is critical to achieving your investment goals, regardless of what you are investing in. For those of you who know who Jim Cramer is, he always recommends buy and homework instead of buy and hold and he is absolutely right. This stage of the investment process is not a invest in it and forget about it process, you need to be vigilant in monitoring your portfolio and make sure all of your investments stick with your investment strategy. Your financial future and livelihood depends on intelligent decisions, and investing is no exception to that rule. Educate yourself every time you have the opportunity to do so where investing in the different options are concerned.

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