How to Invest for the Very First Time

The world of investing can be overwhelming to those who are new to it. You might hear some new terms and acronyms you’ve never heard before. And that terminology can be intimidating. The reality is, though, that investing for the first time doesn’t have to be confusing. There are plenty of options to help newcomers invest with confidence. If you’re interested in investing for the first time, consider these tips for getting started.

Decide How Much to Invest

One of the toughest decisions many first-time investors face is how much to take from their savings account or divert from other financial priorities. But you don’t need to have a lot of money set aside to start investing. For most types of investments, you can get started with only $500–$1,000 whether you’re investing on your own or allowing your employer to deduct a portion of your paycheck.

Set Realistic Expectations

As a first time investor, it’s important to set realistic expectations for how much you stand to gain or lose from your investments. Younger investors often can choose higher-risk portfolios, but investing should never be viewed as a way to get rich quickly. Remember to think long term.

Determine Your Risk Profile

There are many online tools you can use to help you determine how risk averse you are. Being risk averse means you are more comfortable with conservative investment options with low amounts of risk. If you are risk tolerant, this means you are more comfortable with the idea of risk and might be more likely to pursue a more moderate or higher risk investment portfolio.

Regardless of your risk profile, your investment portfolio can often be more aggressive or risky when you’re young, but should typically become less risky as you age. As you get closer to needing to withdraw the money in your investment accounts, it is wise to manage the risk level of your investments more actively.

Research Simple Investing Options

Another thing that seems to intimidate most first-time investors is the great number of options for investing. When you’re a beginner, it’s best to keep your investments simple, especially if you’re busy or prefer a hands-off approach. Talk to professionals you trust or read a book about investing to learn how to invest your money. You can always find a financial advisor or CERTIFIED FINANCIAL PLANNER™ professional to help you make a plan that’s right for you.

Make Your First Investment

The final step is to just get started by making your first investment. The more experience you gain with investing, the more comfortable and knowledgeable you will become about how to invest in a way that aligns with your personal goals and profile.

* Non-deposit investment products and services are offered through CUSO Financial Services, L.P. ("CFS"), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. UFCU has contracted with CFS to make non-deposit investment products and services available to credit union members.

CFS does not provide tax or legal advice. For such guidance, please consult a tax and/or legal advisor.