Investment Advice for Beginners

Peter Lynch is a stock investor on Wall Street and a research consultant with Fidelity Investments. He is a widely respected investor who is well-known for sound investment advice. One of his most popular investment strategies – “Invest in what you know”, which may seem simple, but is completely sound. Lynch believes that an individual investor can make more money in stocks than can a manager, as the personal investor is better able to spot a good investment.

Investment advice for beginners is exactly what Peter Lynch specializes. Through his many publications, he imparts wise idioms that are part experience and part common sense. He has a knack of making a complicated subject seem somewhat elementary. By advising investors to look at a company’s core fundamentals when conducting research, and most importantly to conduct thorough research, Welch teaches beginning investors how to be diligent in their quest for a good investment opportunity and only go for stocks that are easily understood.

For the beginning investor, there are many other options than just stock market investments. Real estate investments are another worthy endeavor, as well as mutual funds. If your employer offers a 401k package, sign up for it and take advantage of the low risk investment. Even though there are certainly risks in any type of investment, prudent research into any of these options will allow you to begin building a sizeable nest age for your future financial security.

It may seem as though there are so many things to comprehend about the investment markets that you will never get a grip on it all. If you feel overwhelmed, make an appointment to talk to a financial counselor or advisor who can assist you in your initial steps in investing. Depending upon your age and financial situation, there are various types of investments that will work better than others will. For instance, a young couple in their late twenties with solid paying careers can likely be more daring with their investments, while a middle-aged single mother earning a mid-range salary needs to be more cautious with her choices.

Essentially, a young investor who is just beginning should look for long-term investment opportunities with growth-oriented goals. For the older investor who is starting out, the strategy should be for long-term investments as well, but with more balance-oriented or income-oriented goals. Your investments that you make throughout your life will be different based upon many factors, but the initial advice remains the same – “invest in what you know”.

If you decide as a beginning investor that you would like to try a long-term, growth-oriented strategy, do a bit of research on various investment sites on the investment topic of no-load mutual funds. A basic approach to basic investment allocation is to put between 65 and 75% of your money into stock funds and the remaining 25 to 35% into mutual funds. Even with a small investment of $5,000 USD, investments in equity income and multi-sector bonds make for a nice conservative portfolio. For those with a more aggressive style, investing the same money into large growth instead of equity income can net a larger profit. [1]

[1] Jack Piazza (2010). The Advantage of No-Load Funds