4 Tips for New Investors – Millennials
The biggest savers and investors for the future are the Millennials. They are the most risk-averse generations. According to the 2013 Accenture report, 43% of Millennials identify as conservative investors, 27% of Gen Xers and 31% Baby Boomers do.
By investing conservatively, or holding your funds in cash, it is counterproductive to the conventional investment advice. It is advised that Millennials should be more aggressive in their investing, so that they can make use of their long-term horizons.
If you are a gun-shy Millennials, here is some on how to invest in the share market without getting burned.
It is important that you learn about various types of investment. Read some basic books and experiment with the market to get a lay of the land. Stocks, shares, bonds, mutual funds are some options that you can invest your money in. Understand the nitty-gritties of these types of funds before you go and lock your money in somewhere.
Make sure that as you build your portfolio over time, to keep your portfolio diverse. This is one of the most and often neglected types on how to invest in shares. You should look at different types of shares in different industries. This will help to manage your risk consumption capabilities. When one industry is not doing so well you have your other investments to back you up.
DO NOT TRY TO BEAT THE MARKET
As a new investor, do not try to beat the market. No one who invests during a bull or bear market will come out over the index fund. It is better to participate in the market and then make use of the profits you are getting as opposed to coming out on top.
SET YOUR GOALSWhen you first get into the share market, it is important to set your financial goals in mind. The amount of money you keep aside for investing and the reason for your investments should be defined clearly. This will dissuade you from over-investing or under investing in the future.