Become a Forbes member and gain unlimited access to bold ideas shaking up industries, expert guides and practical investment advice that keeps you ahead of the market. However, there are ways to take advantage of the market even if you have less knowledge. One of the best is an index fund, which includes a collection of stocks. If any single stock performs poorly, it’s likely not going to affect the index much.

Value stocks are considered safer, more stable investments than growth stocks, but they may not have as much long-term upside potential. Exxon Mobil (XOM), Johnson & Johnson (JNJ) and Verizon Communications (VZ) are three examples of popular value stocks. If you’re younger, you have a longer time horizon and can allocate more of your investment portfolio. In other words, you have some wiggle room to be more risky, allocating up to 70% to 90% of your portfolio to stocks. If you’re new to investing, you’ll want to look for companies with a competitive edge, with the potential for growth and stability.

Key things to consider before you start investing

Retailers with robust pricing power and strong brand loyalty are better equipped to navigate this environment. If you’re already investing through a 401(k) and looking for other ways to invest and earn a good return, read on for five options that are a good fit for beginners. It’s a low-risk strategy that doesn’t require a lot of skill or knowledge and is the core pillar of many timeless investment strategies. Doing so will give you experience using online investing software and teach you the basics of how investing works.

This list may change in the future, but for now, it’s a collection of the best ways to get started for someone completely new to investing. Of course, you’re only investing once you add money to the account and buy investments, something you’ll want to do regularly for the best results. You can set up automatic transfers from your checking account to your investment account or even directly from your paycheck if your employer allows that. While that used to be a pricey proposition, nowadays it can be surprisingly affordable to hire professional help thanks to the advent of automated portfolio management services, a.k.a. robo-advisors.

Artificial Intelligence (AI) Startups

Now you can own part of famous paintings by world-renowned artists even if you don’t have a lot of capital. Creating an investment plan as a beginner is a bit like making a new workout plan for someone who’s never gone to the gym before. Some staples have to be included, but if the plan is too boring, they won’t stick with it long enough to see results.

• Companies like Lululemon (LULU) and RH (formerly Restoration Hardware) have embraced this trend and delivered strong financial performance.
• One way you can actually lower your risk is by committing to holding your investments longer.
• You might think that automated investing would be one of the best investments for beginners because it’s hands-off, but I actually think it can do more harm than good if you start too soon.
• They make it much easier to diversify your investments since you don’t have to pick individual stocks yourself.
• Do you want long-term growth potential while still being able to sleep at night?
• This list may change in the future, but for now, it’s a collection of the best ways to get started for someone completely new to investing.

In a nutshell, a robo-advisor is a service offered by a brokerage. It will construct and maintain a portfolio of stock- and bond-based index funds designed to maximize your return potential while keeping your risk level appropriate for your needs. Mutual fund investing is an example of this strategy, as are exchange-traded funds (ETFs). Alternatively, you can hire a financial or investment advisor or use a robo-advisor to design and implement an investment strategy on your behalf. All of these are ways to invest without doing too much research and with minimal ongoing time commitment to managing your portfolio.

Tax Efficient Long-Term Investing

Our editorial team does not receive direct compensation from our advertisers. At Bankrate we strive to help you make smarter financial decisions. While we adhere to stricteditorial integrity, this post may contain references to products from our partners. Fortunately, there are alternative ways to invest in real estate. Many, such as real estate investment trusts (REITs), are much more passive than actually becoming a landlord.

How to Invest Money in 5 Steps

The payments we receive for those placements affects how and where advertisers’ offers appear on the site. This site does not include all companies or products available within the market. As mentioned above, no investing strategy works all of the time. Make sure you understand your investment strategy, which will give you a better chance of sticking with it when it falls out of favor. No investment approach works 100 percent of the time, that’s why it’s key to focus on the long term and stick to your plan. A management fee charged by the robo-advisor, often around 0.25 percent annually, plus the cost of any funds in the account.

Robo-advisor portfolio

Investing in individual stocks can be a great way to build wealth — if you have the time and knowledge to do it right. If you don’t, there’s absolutely nothing wrong with investing in ETFs or mutual funds to get exposure to the stock market. Building a diversified portfolio of individual stocks and bonds takes time and expertise, so most investors benefit from fund investing. Index funds and ETFs are typically low-cost and easy to manage, as it may take only four or five funds to build adequate diversification.

Through crowdfunding platforms, investors can pool funds to invest in various real estate projects—ranging from residential complexes to commercial spaces. A target-date mutual fund often holds a mix of stocks and bonds. If you plan to retire in about 30 years, you could choose a target-date fund with 2050 or 2055 in the name.

• Investing money in the stock market is one of the main ways to build wealth and save for long-term goals such as retirement.
• To put returns like this into perspective, a $10,000 investment compounded at 10% for 30 years would grow to almost $175,000.
• They could give their automatic monthly contributions to savings a boost as well.

Healthcare REITs, which focus on properties like senior living facilities and medical offices, also present a stable investment option. With a projected annual growth rate of 5.6% per year for healthcare expenditures through 2032, according to data shared by Becker’s Hospital CFO Report, the sector is poised for sustained growth. However, like real estate interest rates, inflation poses a significant challenge for the retail sector. Rising costs for goods and Best investment opportunities services could dampen consumer spending, particularly in discretionary categories.

Investing money may seem intimidating, especially if you’ve never done it before. At first, the goal is to avoid having to sell your investments every time you get a flat tire or some other unforeseen expenses pop up. A more achievable target might be having $1,000 set aside before you invest, since this would make you better prepared than most Americans for unplanned expenses. It’s also smart to get rid of any high-interest debt (like credit cards) before investing.