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<h1 class="gnt_ar_hl" elementtiming="ar-headline" style="text-align: center;"><strong>investing tips beginners need to know</strong></h1>[/et_pb_text][/et_pb_column][/et_pb_row][et_pb_row _builder_version="4.0.9"][et_pb_column type="4_4" _builder_version="4.0.9"][et_pb_text _builder_version="4.0.9"]<div align="center">
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<p class="gnt_ar_b_p" style="text-align: right;"><span style="color: #000000;">Newsflash for investing newbies: You don’t need a Ph.D. in finance to start saving for retirement or other long-term goals.</span></p>
<p class="gnt_ar_b_p" style="text-align: right;"><span style="color: #000000;">But you can’t rely on beginner’s luck either. You need to learn and implement some basic investing concepts. Keep it simple. Even acing Investing 101 strategies will help you achieve goals like saving for a home, boosting your 401(k) balance so you can retire in style, or becoming a millionaire.</span></p>
<p class="gnt_ar_b_p" style="text-align: right;"><span style="color: #000000;">Here are 10 investing tips that financial advisers say can help beginner investors build wealth over the long haul.</span></p>
<h2 class="gnt_ar_b_h2" style="text-align: right;"><span style="color: #000000;">Tip No. 1: Start early</span></h2>
<p class="gnt_ar_b_p" style="text-align: right;"><span style="color: #000000;">When it comes to investing, time is your friend.</span></p>
<p class="gnt_ar_b_p" style="text-align: right;"><span style="color: #000000;">“When should you start investing? The answer is as soon as possible,” says Blair duQuesnay, investment adviser at Ritholtz Wealth Management in New Orleans.</span></p>
<p class="gnt_ar_b_p" style="text-align: justify;"><span style="color: #000000;">The more time your money is invested, the more time it has to grow. The beauty of investing is you earn interest on the interest you’ve already earned on your initial investment – a concept known as “compound interest.” Legendary scientist Albert Einstein reportedly once said that compound interest is “the eighth wonder of the world” and “the most powerful force in the universe.” </span></p>
<p class="gnt_ar_b_p" style="text-align: justify;"><span style="color: #000000;">A calculation done by the Federal Reserve Bank of St. Louis highlights the winning math behind compounding. An investor who starts saving at age 25 and invests $5,000 a year for 10 years in a row and earns 8% per year would accumulate $787,180 by age 65. In contrast, someone that begins investing 10 years later at age 35 and sets aside $5,000 a year for 30 years would have just $611,730 at age 65.</span></p>
<p class="gnt_ar_b_p" style="text-align: justify;"><span style="color: #000000;">“It’s like a snowball effect,” duQuesnay says. “The longer you are invested the more you benefit.” </span></p>
<h2 class="gnt_ar_b_h2" style="text-align: justify;"><span style="color: #000000;">Tip 2: Go for growth </span></h2>
<p class="gnt_ar_b_p" style="text-align: justify;"><span style="color: #000000;">There’s a big difference between saving and investing. Investing is about taking some risk to reap higher potential returns.  </span></p>
<p class="gnt_ar_b_p" style="text-align: justify;"><span style="color: #000000;">Large U.S. stocks, for example, generated compound annual returns of 10% in the 93 years ending in 2018, according to Morningstar. In contrast, a 20-year government bond returned 5.5% per year and 30-day Treasury bills gained 3.3 per annum. During that period, $1 invested in large stocks grew to $7,030, versus just $142 for the long-term bond and $21 for the Treasury bill. </span></p>
<p class="gnt_ar_b_p" style="text-align: justify;"><span style="color: #000000;">“Historically, investing in the stock market outperforms having your money sitting in cash,” says Dominique Broadway, founder of Finances De-mys-ti-fied.  </span></p>
<h2 class="gnt_ar_b_h2" style="text-align: justify;"><span style="color: #000000;">Tip 3: Focus on your 401(k) </span></h2>
<p class="gnt_ar_b_p" style="text-align: justify;"><span style="color: #000000;">If you just landed a job and your employer offers a 401(k) retirement plan, make sure you enroll. It’s an easy way to regularly sock away money that you’ll need when you stop working decades from now. </span></p>
<p class="gnt_ar_b_p" style="text-align: justify;"><span style="color: #000000;">One benefit of a 401(k) is you’ll automatically have a portion of each paycheck go directly into your retirement savings plan, which offers a menu of diversified investment options to choose from. Since contributions in a traditional 401(k) are made with pre-tax dollars, you’ll also lower your tax bill. Another plus is most employers also contribute to your 401(k) via matching contributions. </span></p>
<p class="gnt_ar_b_p" style="text-align: justify;"><span style="color: #000000;">“The first thing I would do as a young investor at a new job is to find out exactly what the 401(k) plan offers, (and) what the match is,” Broadway says.  </span></p>
<p class="gnt_ar_b_p" style="text-align: justify;"><span style="color: #000000;">Ideally, you want to contribute enough to your 401(k) to be eligible for the full company match.  </span></p>
<p class="gnt_ar_b_p" style="text-align: justify;"><span style="color: #000000;">The average company match was 4.7%, a Fidelity study found last year. “The company match is like getting an extra paycheck sent to your retirement account,” says duQuesnay says. </span></p>
<h2 class="gnt_ar_b_h2" style="text-align: justify;"><span style="color: #000000;">Tip 4: Keep it simple      </span></h2>
<p class="gnt_ar_b_p" style="text-align: justify;"><span style="color: #000000;">No clue how to pick the right stocks or mutual funds? Or how to build a diversified portfolio? Don’t worry about it.  </span></p>
<p class="gnt_ar_b_p" style="text-align: justify;"><span style="color: #000000;">Most 401(k) plans offer “target-date” funds. These funds do all the work for you. They pick the individual investments like stocks and bonds, as well as make sure your holdings are diversified and not too risky for your age. </span></p>
<p class="gnt_ar_b_p" style="text-align: justify;"><span style="color: #000000;">“Target-date funds are a great place to start,” Broadway says. </span></p>
<p class="gnt_ar_b_p" style="text-align: justify;"><span style="color: #000000;">Here’s how these funds work. You pick a target year that’s closest to the year you’ll think you’ll stop working. For example, you’d invest in a “2050 Fund” if you plan on retiring 30 years from now. As you move closer to your retirement target date, the fund will lower your fund’s risk profile by reducing the percentage of more volatile stocks and shift the money into safer investments like bonds and cash. </span></p>
<p class="gnt_ar_b_p" style="text-align: justify;"><span style="color: #000000;">“Rather than having to pick individual funds and decide how much you want to contribute to each one all by yourself, they do it for you,” duQuesnay says.  </span></p>
<h2 class="gnt_ar_b_h2" style="text-align: justify;"><span style="color: #000000;">Tip 5: Put your savings on autopilot </span></h2>
<p class="gnt_ar_b_p" style="text-align: justify;"><span style="color: #000000;">What you don’t want to do is put off saving until tomorrow. To avoid procrastination, set your long-term investments on autopilot, advises Scott Pedvis, a financial adviser with Wells Fargo Advisors in New York City.  </span></p>
<p class="gnt_ar_b_p" style="text-align: justify;"><span style="color: #000000;">“Automate your investments,” Pedvis says. If you aren’t already saving automatically in your 401(k) via payroll deductions at work, set up a system where money is taken out of your checking account and moved into your investment account on a predetermined date each month. </span></p>
<p class="gnt_ar_b_p" style="text-align: justify;"><span style="color: #000000;">“It forces you to save, and takes the emotion out of investing,” says Pedvis, adding that automatic savings also removes the temptation to try to time the market, or get in and out at precisely the right time, which is difficult.  </span></p>
<h2 class="gnt_ar_b_h2" style="text-align: justify;"><span style="color: #000000;">Tip 6: Don’t put all your eggs in one basket </span></h2>
<p class="gnt_ar_b_p" style="text-align: justify;"><span style="color: #000000;">Think Tesla will dominate the electric car space forever? Well, even if you do, don’t invest every penny of your money in Elon Musk’s company.  </span></p>
<p class="gnt_ar_b_p" style="text-align: justify;"><span style="color: #000000;">Why? If you’re wrong and Tesla’s stock tanks, you won’t have anything else in your portfolio to cushion the financial fall. The concept of owning a wide variety of investments is known as diversification. Your much better off investing in funds that own many stocks in different businesses or a variety of interest-paying bonds to spread your risk around.  </span></p>
<p class="gnt_ar_b_p" style="text-align: justify;"><span style="color: #000000;">“Diversification doesn’t mean guaranteed returns or no volatility,” Pedvis says. “The idea is to smooth out the ride.” </span></p>
<h2 class="gnt_ar_b_h2" style="text-align: justify;"><span style="color: #000000;">Tip 7: Figure out your ‘pain’  threshold </span></h2>
<p class="gnt_ar_b_p" style="text-align: justify;"><span style="color: #000000;">Try to determine your maximum pain threshold, or how big a loss you can endure without bailing out of the market at the wrong time.  </span></p>
<p class="gnt_ar_b_p" style="text-align: justify;"><span style="color: #000000;">“The biggest mistake beginners make is forgetting that it is a long-term investment,” Broadway says. “New investors may immediately see their account values fall, get nervous, and sell their investments. Patience is key.” </span></p>
<p class="gnt_ar_b_p" style="text-align: justify;"><span style="color: #000000;">To gauge your true tolerance for risk, Pedvis suggests the following exercise: “Imagine you had $100,000 invested in stocks and the market fell and your account balance fell by $30,000. How are you feeling? Are you losing sleep? Do you not really care?” If a potential loss of that size stresses you out, it’s signaling that you might need to trim the risk in your portfolio.  </span></p>
<h2 class="gnt_ar_b_h2" style="text-align: justify;"><span style="color: #000000;">Tip 8: Try to save at least 10% of your income </span></h2>
<p class="gnt_ar_b_p" style="text-align: justify;"><span style="color: #000000;">“A good rule of thumb is to try to save 10% to 15% of your pay in your retirement plan,” duQuesnay says. (Include any company match in calculating your savings rate.) </span></p>
<p class="gnt_ar_b_p" style="text-align: justify;"><span style="color: #000000;">If you can’t save that much at the start, gradually increase your savings annually, she advises.  </span></p>
<p class="gnt_ar_b_p" style="text-align: justify;"><span style="color: #000000;">“Some 401(k) plans have a feature known as ‘auto-escalation,’ where you agree today to save more tomorrow and your company’s plan will automatically increase the portion of your paycheck deducted each year,” duQuesnay says. </span></p>
<h2 class="gnt_ar_b_h2" style="text-align: justify;"><span style="color: #000000;">Tip 9: Don’t listen to pundits </span></h2>
<p class="gnt_ar_b_p" style="text-align: justify;"><span style="color: #000000;">Turn off the financial news. Bears warning of a market meltdown might spook you out of the market at the wrong time. And bulls predicting that the market will double might make you overly optimistic and vulnerable to a big selloff if you go all in. </span></p>
<p class="gnt_ar_b_p" style="text-align: justify;"><span style="color: #000000;">“A big mistake beginner investors make is taking what’s said by others as gospel,” Pedvis says.  </span></p>
<h2 class="gnt_ar_b_h2" style="text-align: justify;"><span style="color: #000000;">Tip 10: Seek help if you need it </span></h2>
<p class="gnt_ar_b_p" style="text-align: justify;"><span style="color: #000000;">And if you just don’t feel comfortable getting started on your own, ask for help, Pedvis adds. </span></p>
<p class="gnt_ar_b_p" style="text-align: justify;"><span style="color: #000000;">“A lot of investing can be done independently, but not everything in your life can be do-it-yourself,” Pedvis says. </span></p>
<p class="gnt_ar_b_p" style="text-align: justify;"><span style="color: #000000;">You can get help from a financial planner or adviser, an accountant or lawyer, or people in your life that have success managing money, he says. </span></p>
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<div align="center" style="text-align: justify;"><span><span style="color: #000000;">To read the full article, </span><a href="https://www.usatoday.com/story/money/2020/07/20/long-term-investing-tips-beginners/5445223002/">click here</a><span style="color: #000000;">.</span></span></div>[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section]