The new investor can start investing small with a large selection of investment options to choose from. If you want to go it alone and save money, your best investment path will depend on how much freedom you want. Here are two low-cost ways to start investing on your own.
If you want to start investing the easy way with professional money managers making the specific investment decisions for you I recommend no-load mutual funds. You save money by not paying a sales charge or commission when you invest, and yearly expenses can be quite low. With a major fund family you have a wide variety of investment options. This is your best investment path if you want help with investment management.
If you want the freedom to invest in anything from real HULT PRIVATE estate to individual stocks and bonds… gold and silver or oil and gas… even in mutual funds: open an account with a major discount broker. It will cost about $10 to make an investment on your computer and the same to sell it. You can buy or sell in seconds on any business day. The investment management is all up to you.
With a discount brokerage account the new investor will save money and have more investment options than ever before in history. Trust me, compared to the old days the new investor has it made today. It’s even easier to start investing than you think, thanks in part to stocks that are actually exchange traded funds (ETFs). Let me give you an example.
Let’s say that gold prices have your attention and you would like a piece of the action. You only want to invest about $1000, and want to be able to get in and out quickly in case things get dicey in the gold market. You can pour over the stats for various gold mining stocks in search of the best investment. Or you can simply buy shares in an ETF that invests in gold bullion and tracks the price of it… stock symbol GLD.
A few years ago I would have advised every new investor to invest in mutual funds. But for you more adventuresome types who want to play a more active role in your own investment management… open an account with a discount broker. You don’t need to trade stocks or otherwise speculate just because you have an account. Look into ETFs on your broker’s web site. These investment funds can make your investing life easier.
If you want to start investing on your own I suggest you start small if you pick your own investments in a brokerage account. For larger amounts, like IRA rollovers, I suggest no-load funds for the new investor. Or, try it both ways. But if you really want to make your money grow, do your homework along the way.
A retired financial planner, James Leitz has an MBA (finance) and 35 years of investing experience. For 20 years he advised individual investors, working directly with them helping them to reach their financial goals.