Spiffy Entertainment

Roadmap to Starting Out

This is something that trips people up a lot… where do you start? I know a lot of people look for advice anywhere they can find it, hoping to find a “hot stock” to put money into or look for a fast and easy way to succeed in the market. I know, because I made that mistake myself. So with my mistakes behind me, if I knew then what I know now, I’d proceed like this.

  • First, make a plan and set goals for what you’re looking to achieve through investing. Long term growth for retirement? Dividend investing for additional income? Saving money for a big purchase? There’s many avenues to take, but you have to figure that out first… don’t go in blind.

  • Once you have that figured out, then what? Then you pick the stocks, ETF’s or funds that best resonate with your goals. Long term growth goals can be a little easier than most options. A diversified set of index funds and/or ETF’s and you don’t have to do much with your account… just put money into the funds and watch it grow. 

  • If your goals are more immediate and you need to pick individual stocks however, that’s where the work comes in. First and foremost your best bet is to invest in what you know. That’s age old advice from one of the most successful investors ever, Warren Buffett. If there’s products from a company you use every day and have a long proven track record, it could be a good investment! Even still, before throwing down, do your due diligence and research the company. See what professional analysts are saying, check the income statement and balance sheet to assess their profitability. You can also find out if the stock price is fairly valued when you plan to buy it.

  • Finally, once you have your portfolio sorted out, maintain it however you wish. There’s really nothing else to do besides increasing your positions, removing what’s not working out and buying new positions. You can try to read the market and buy in at price points or you can use dollar cost averaging… which is simply putting money into your positions at regular intervals regardless of how the market is moving. It’s all a matter of preference, so just choose the method you’re most comfortable with.