Everyone must begin somewhere in their investing journey. In reality, when you are first starting your investing journey, it is a very good practice to begin with little. Small investment ideas are based around your financial budget, so all you have to do is walk you through some of the various small investment ideas according to your own budget. For example, I started out by only investing my money in CDs. Over the years I added other things like stocks, bonds and real estate, and now I am extremely rich.
If you are looking for the best investment strategy, then saving money should be number one. If you have a saving account, then you need to add some things into it such as checking and savings accounts with online banks. By doing this, you can enjoy higher rates of interest on the money that you have already saved.
If you like to invest in alternative investments, then that would be another great place to begin. I started out by investing in the stock market, but realized that there were other places where I could get higher returns. So now I consider myself a greater investor because I have multiple avenues to get to the same end result. Here are two other alternative investments that I think are great for people who are just getting started with investing.
One of these is exchange-traded funds. What exchange traded funds do is offer you a way to invest in stocks, bonds and other options without dealing with the hassle of trading yourself. Instead, you let an expert who is a financial advisor, insurance agent or a banker handle it for you. This is especially a good choice if you want to get into higher-risk stocks such as etfs, dividend stocks and high cap stocks.
Another alternative investing idea is to go with what I consider one of the best methods of investing today; individual stocks. Investing in individual stocks allows you to get a firsthand look at the business before deciding whether or not to buy it or sell it. Individual stocks offer you the potential to make much more than you would do it with mutual funds because you are not paying fees to own a portion of the company. Individual stocks also offer some flexibility, allowing you to get into and out of the market quickly.
So which is best? It really comes down to identifying which of the investing methods you like best. For many people, individual stocks offer the best return on their investment, but it is also important to consider your tolerance for risk. You will likely have to change your investment plan quite a bit to make sure that you are saving enough to live off of and that you have the right amount of exposure.
Another popular method of investing today is what is commonly referred to as a self directed IRA. What this is investing in a particular mutual fund and then having control of the buying and selling of the securities within that fund. Instead of investing in a fund and trusting that the managers of that fund will do well, you invest directly in your own fund. This allows you to control your own fate with your investments, but it does require that you invest a significant amount of money into your IRA. Self directed IRA investing is best for people who are comfortable with investing on their own and who have a strong desire to make their own investment decisions.
Another option for investing on a hands off basis is what is known as an exchange traded fund or ETF. Exchange traded funds are just like mutual funds except instead of buying shares in the funds, you buy small amounts of the various investments. By investing in these types of investments you can have the best of both worlds because you can have good returns with good risk, or you can have good returns with moderate risk. The drawback to these types of investments is that they tend to be less liquid. In addition, these types of investments tend to have very low annual performance gains because most of the returns are realized from capital gains and dividends rather than from interest or other direct charges on investments.