Investing is the process of using your money to work toward your financial goals. The Investors Centre can help you grow your wealth by achieving higher returns than insured savings products such as CDs or bonds, particularly over the long term. It can also help you reach retirement or college funding goals, as well as provide income in the form of dividends or interest.
The best way to start investing is to determine your overarching investment goals, as well as your risk tolerance and time horizon (i.e., how soon you’ll need to access your funds). It’s a good idea to look at the big picture so that you’re not tempted to sell your investments when they drop in value, hurting your long-term gains.
How to Build a Diversified Investment Portfolio
Once you know what your goals are, then you can figure out how much risk you’re comfortable taking on, as well as any other factors that may impact your decision, such as how you’ll tax your investments and whether you want to work with a financial adviser or robo-advisor. You’ll also need to decide if you’ll manage your investments on your own or have someone else do it for you, and if so, how.
The amount of money you start with isn’t really that important, as it’s more about consistently investing small amounts over the long term to see your money potentially grow. It’s also a good idea to make sure that you’ve taken care of more immediate financial needs like paying off high-interest debt and establishing an emergency fund before you begin investing.