Undeniably, the Wolf of Wall Street portrayed Jordan Belfort as a wild famed investor, rightfully so. However, investors around the world can learn a thing or two from this former Wall Street goliath. If you are like most people, then you struggle with investing or you do not know how to start. In this article, we will highlight three actionable tips to help you start investing.
1. Invest in Low-Fee Mutual Funds and ETFs
Most investors enter the stock market with the preconceived notion that they must invest in individual stocks, such as Microsoft or Amazon. However, this is no longer the case and is the riskiest form of investing which leads to a loss on your initial investment.
Investors need to invest in mutual funds or low-fee ETFs. The philosophy behind these two investment vehicles is simple. Take a pool of money and invest it across multiple different stocks. This mitigates risk, offers exposure to a wide range of assets, and traditionally outperforms the broader stock market.
Graham Stepan, a 28-year old multi-millionaire is the biggest advocate of this strategy. He is not the only one. In fact, the legendary Warren Buffet routinely invests in mutual funds and ETFs. So, if you want to safely invest in the stock market, mitigate your risk, and outperform the broader financial market, then you need to eye in on some mutual funds or ETFs and deploy your capital.
2. Choose a Low Fee Brokerage
All too often, investors invest their money in a brokerage account that charges absurd fees. Fortunately, the digital age has paved the way for low-fee or fee-free investing, as M1 finance employs. The largest brokerages all rolled out zero-commission trading. This is ideal if you expect to start investing for the long-term. Additionally, partnering with a brokerage that offers low or no fees protects your capital and does not cut into the investing profits you will make.
3. Embrace a Long-Term Mindset
Day traders and active traders get burned on the market. If you are not professionally trained, avoid day trading at all costs. Instead, embrace a long-term mindset. Why? As history reveals, the market trends upwards and to the right, so over time, you will make money on your investments. In particular, investing in dividend stocks is a safe bet.
Besides appreciation, you also get to enjoy a monthly or annual payout from that company (cha-ching!). Remember, Warren Buffet is one of the richest people in the world, and his investing philosophy is wildly simple. He embraces a long-term mindset and invests in safe securities that outperform the broader stock market over time.
Wrapping Up: 3 Actionable Tips for Investing
As you can see, investing does not have to be hard. Do not overcomplicate it! All in all, make sure you invest in mutual funds or ETFS, partner with a low-fee or fee-free broker, and embrace a long-term mindset. If Warren Buffet does this, then take note. Clearly it works.
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