5 steps to start investing – Investment funds are an affordable and accessible option for diversifying your savings, even for modest investors. You don’t need a lot of money to begin investing.
An investment fund is a pool of money from many individual investors that is professionally managed by a portfolio manager who selects the stocks, bonds and/or other securities for the fund, based on the objectives of the fund. These funds can be an effective way to help you save towards short and long-term financial goals.
Here are some tips to get started:
Start saving. Good money habits such as budgeting and setting up a savings account with regular automatic contributions can help to get you started. So, start with savings, contribute any amount regularly to develop the habit, then progress to an investment funds account when you have saved the minimum amount to start investing.
Set it and forget it. Most investment funds have a minimum initial investment (e.g. $100 to $500) but no minimum on additional investments. However, some mutual funds have a lower minimum purchase amount (e.g. $25 monthly) if you make regular investments through an automatic purchase plan.
Size up. Make it a habit to increase your contributions regularly. As a guideline, you may want to increase the amount whenever you get a raise or find yourself with more disposable income.
Seek advice. Research shows that the longer an investor works with a licensed advisor, the better their financial outcome. Advisors can answer your questions and help you build and stick with an investment plan. They will also help modify your plan as required, based on your needs and goals and any changes in your life.
Stay informed. Make sure you read and understand the reports you receive from your advisor. You’ll gain a greater understanding of investing, which will help you work towards your financial goals with greater investment confidence.
