Tips for First Time Investors

With anything new, and particularly as a first-time investor, you will need to put the work in to learn about the subject. It is important to gain some foundational knowledge around investing before putting your hard earned money on the table. And for that reason, we have put some tips together that can help to get you started. 

  • Financial Planning  

Financial planning determines your financial goals and what is needed to achieve those goals. Implementing a comprehensive plan will allow you to get to where you want to be short term and long term financially. A financial plan may include monthly savings, debt repayment, budgeting, and investment. Your plan should be reviewed and rebalanced regularly to stay on course and can be amended if your goals change.  

  • Pick the right adviser  

A Wealth Manager can guide you and help you to create a realistic plan that is tailored to your specific needs. They will also assist with risk management, investment strategy, asset allocation, among other aspects to look at your finances as a whole.  

Often, family members or friends may recommend that you use the same adviser as they do. But you should find the right match for you. Take into consideration what exactly it is you want from an adviser and how involved you would like them to be in the decision-making process for your investments. 

  • Diversification 

Diversification in the investment world essentially means do not put all your eggs in one basket. As a strategy to manage risk, investing in a wide range of areas, diversification gives your investment portfolio the opportunity to perform better. This is because not all investments work well at the same time and some types of investments may be impacted by certain economic factors such as rates of inflation or exchange rates. In not having a diverse portfolio you leave yourself open to unnecessary risk that is unlikely to give a larger payoff. 

  • Be guided by goals  

Let your long-term goals determine your next move. Although it can be difficult, investors need to be guided by their targets rather than by their emotions. In such business, emotions can often run high, especially when the markets take a turn. You could find yourself overruled by confidence or overrun by fear. If you are feeling stressed by market news, check in with your financial adviser.  

  • Be mindful of your skillset  

There are a lot of investors out there who believe they can beat the market if they frequently trade. However, this could just leave those investors with lower returns than if they had held on to a wide range of investments. This ties in with the point above of staying guided by your goals. Do not let overconfidence rule. 

  • Only invest what you can  

The sooner you begin saving or start investing the more you will be able to benefit from your returns. On the other hand, you do not want to start out with too much too soon. It can be tempting to put large amounts of money towards your investments but don’t go as far as to leave yourself short in your daily spending otherwise you could end up having to dip into those savings, pull back from an investment or use credit cards that you will have to pay back later – an extra cost that could take a toll on your financial plan. 

  • Think twice before following the crowd  

As humans, we often feel safer when following the herd, and walking in the opposite direction can almost feel wrong. Although it might seem like the right move to follow what everybody else is doing, that is not necessarily always the wisest thing to do. Think twice about these kinds of decisions and ask yourself if this is really the right opportunity for you, and does it align with your plan or your goals? Stay aware – and always do your research. 

  • Check-in regularly  

There’s a lot more to investing than meets the eyes, it can be complex and should not be treated as a simple gamble. Whether you are new to the game or looking for some help to reach your goals our Wealth Managers at Private Client Consultancy are here to help you every step of the way. Contact us today to put your plan into action.