Beginner Investing, Investing 101

The best free beginner investing strategies. Get started right for the best payoff.

Some may refer to this page as the "investing for dummies" guide. Since I refuse to refer to myself as a dummy and you probably do too, I like to call it Investing 101. That sounds so much better.

Slow, Steady, End-of-Mind Approach

So are you wondering when to start investing? The sooner the better. The more time you have, the better chances you have of being successful.

When thinking about good solid investing it is hard to go wrong with a slow, steady, focused, determined, goal oriented, and end-in-mind type of approach.

Notice the images I put on this page to try and get that message across. Investing money can be a lot like the story of the tortoise and the hare.

Taking the hare's approach and trying to get a lot for your money very quickly may cause problems down the road. Just look at the current economic crisis, which was at least partly caused by so many purchasing homes out of their means and counting on an ever-increasing appreciation rate to help them out.

Beginner Investing Definitions

• Portfolio-a collection of investments.
• Risk-exposure to the chance of loss. In investments, a higher risk will typically mean the chance of a higher return. Conversely, a lower risk will typically mean your return will be smaller.
• Diversity-having a variety of investment types...like stocks, bonds, and real estate.
• Mutual fund-a professionally managed collective investment scheme. It typically consists of stocks, bonds, commodities, or other stuff.

Diversity is Good

Your portfolio should be diverse. In other words you do not want to put all your eggs in one basket. Investing in a mutual fund is a perfect example of how to diversify. Remember that not all mutual funds are created equal, some have high risk, while others have low risk.

Risk Level

Your portfolio should reflect your appropriate level of risk. Your risk can be influenced by a few things. Your individual level of comfort with risking your money and how much time you have before you are wanting to use your investment.

If your level of comfort for losing your money is not very tolerant, you may want may consider investing lower risk. On the other hand, if you do not have a problem seeing the value of your investment go down realizing that the potential upside could be very great, you will probably want to invest higher risk.

Investment Time

The amount of time you have to invest is also very critical in determining your risk level. If you have just graduated from college and are wanting to put some money away for retirement savings, you can probably afford to take a higher risk on your investments. On the other hand if you are approaching retirement age, you do not have a lot of time to invest and will want to lessen your risk.

Investment potential is often based on past performance. Of course, none of us know the future so realize that all investment has some risk.

Investing for Fun

Investing does not have to be all serious and boring. To add a little diversity to your portfolio, consider bringing out the treasure seeking pirate in you by investing in gold.

If gold is not your thing try investing in silver.

I am not so good at it myself, but you can also try a little online stock investing by yourself. Remember that beginner investing is not always easy. You may want to practice a little by doing some "fantasy investing" to begin with.

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