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Starting Your Investment Portfolio

July 24, 2013

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Investment Advice for Beginners

THUNDER BAY – You’ve started your career, and you’ve got your debt either paid off or under control. After you’ve budgeted your income, you realize you have some extra savings and are thinking about investing it but you’re not sure what your best options are because it’s new to you.

Here is some investment advice for those of you who are just getting started.

Investing – the younger you start the better

The younger you are when you start investing, the better returns you’ll have over the longer term. Most believe you need a lump sum to get started, but truth is you can start with as little as $25 per month. There will always be ups and downs in the early years, but when you factor in compounding rates of return the better off you’ll be in the later years.

Invest with a goal in mind

When you’re getting started, it’s important to know what your short term and long term goals are and what you’re plan is for achieving them. Your goals will help you determine what the best investment strategy is to take in the short and long term. If your goal is to buy a house, it’ll be different than if your goal is to save for retirement. Identify your goals, make a plan and stick with it through the ups and downs.

Diversify your investments

Diversifying your investments is important for everyone and especially those who are just getting started. Building confidence is an important thing when you’re investing, and by not diversifying you’re usually taking on more risk that could shake your confidence should it not go as you expected. Getting started with a diversified portfolio, gives you the best chance to build up your assets for the long term.

Consult with someone who has the knowledge

Speak with an investment advisor, or even a family or friend with investment experience who you trust. They’ll help you decide if a Tax-free savings account (TSFA) or a Registered Retirement Savings Plan (RRSP) is right for you, and help you get started.

The Bottom Line

Many of us don’t see the long term benefit of getting started with any investment when were young because it takes a long time before you have a meaningful amount.