Keen to start investing? Here’s what you need to do first…

Julie Brownlee, Fsp Invest, 29 May. 2015

Tags: investing, start investing, beginner investor, new investor, financial goals, stock market, investing on the stock market,

Investing on the stock market for the long-term gives you the opportunity to grow your wealth.

But you shouldn’t consider investing on the stock market unless you’re prepared to part with your cash for a number of years.

So how do you know if you’re ready to start investing?

Read on to find out…

Before investing, give your finances the once over

You should only invest money in the stock market that you don’t need at the moment. The money you invest is at risk and you should view it as a long-term commitment.

So before considering investing, work out how much money you can afford to put on the stock market. If you don’t have a large lump sum, you can either save up for this or look at investing in unit trusts instead.

Instead of picking individual stocks, by investing in unit trusts a fund manager picks the stocks. You just have to decide what type of unit trust you want to invest into.

Write down your financial goals

Work out your financial goals for the short-term, medium-term and long-term. This will help you to pick the right investments for you.

It’s best to aim for conservative growth with your investments. This will also help you avoid investing in overly risky instruments. For example, growth of 10% to 15% a year is much more achievable than growth of 100%.

You should also spread your money amongst different investments as this reduces your risk. As well as investing in different shares, look at bonds, listed property and exchange traded funds.

Before investing, spend as much time as you can researching the different opportunities out there. This will help to grow your knowledge and help you make more informed decisions with your money.

And if you feel you need advice, speak to a financial advisor.

So there you have it. What you need to do first if you’re keen to start investing.

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