Best Investing Tips For Beginners – 25 Finance Experts Share Their Advice

One of the most difficult investment decisions for beginners is the decision to start investing in the first place. It’s also one of the most important. 

Doubt, uncertainty, unfamiliarity, and fear tend to hold many people back from ever making that first investment, seeing them go through life missing out on a whole avenue of wealth growth opportunities.

But once you start, investing can become a good habit that you keep up for the rest of your life.  Generally, beginner investors should consider investing with a long-term horizon.

It shouldn't be seen as a 'get rich quick' scheme. As the old axiom goes, it's time in the market, rather than timing the market which matters most. 

So be willing to part with your cash for several years. That way, you've got time on your side to ride out any potential market dips. 

Also, try to invest in what you know and understand, rather than taking a punt on something because of hype. 

If you're struggling to pick a particular stock or asset to invest in, an exchange-traded fund (ETF) which exposes you to a diverse basket of stocks with one trade - such as those which track a 'top 50' or 'top 200' index - could be a simple investment to start with.

Minimize your risk by purchasing index funds or ETFs instead of individual stocks or bonds.  Index funds and ETFs are generally considered to be less risky because they contain a diverse portfolio of companies. 

Owning a broader part of the stock market instead of a few individual companies' stocks helps you diversify and lower your risk.

The other benefit is that index funds and ETFs typically have lower fees, which helps investors keep more money in their pockets. 

Keep an eye on your portfolio management fees and expense ratios to make sure you're not negatively affecting your investment gains with portfolio fees and expenses.

Don't just invest in the stock market, be sure to invest in your financial education. While financial jargon may be hard to understand at first, the more you learn about investing, the fewer mistakes you'll make. 

Free resources like books, articles, and websites are available if you take the time to seek them out.  Take advantage of tax-advantaged accounts.

The money you put towards a 401(k), Roth IRA, 529 plan, or other tax-advantaged accounts will be deducted from your taxable income, so you'll pay less to the government. 

This is a great way to save money over time and build your nest egg faster.

Growing up in a family heavily involved in real estate investing, it was only natural that I too would follow the same path. 

However, over the years and even recently, I have learned that diversification is important. Aside from retirement accounts, I wanted to learn about stock investments. 

I learned by doing and setting up an online trading account. I chose a few stocks after reading about them, and then set up a document with the stock trading symbol, date, and the cost per share. 

I would then log in and check on the stocks I chose. Eventually, I moved to invest small amounts of money to a few here and there.

1. Do not put all your investment eggs in one basket. Diversify.
2. Find respected and knowledgeable people and sources to provide assistance.

It's funny the #1 piece of advice most investors wish they would have done is invest sooner. Simply starting and making your first investment is the single most challenging thing for most beginners. 

There is a debilitating fear that the stock market is too big and too complex for the everyday person to understand, but at its roots, it's just a way to invest in companies you believe will do well in the future.

I always suggest opening a brokerage account like Robinhood or something and investing $100 in a large public company you're familiar with, like Apple, Amazon, Microsoft, or the like. 

You can buy a fractional share in most companies and watch how that fluctuates over a month or two. This is the biggest hurdle most beginners have, and you'll learn so much!

The first thing a beginner investor has to think about is how serious they are about committing to the investment world. 

Do they want to become an active investor? Do they have the time to do so? Would they prefer a more passive approach, with their investment choices working for them?

The above questions are important as they’ll determine your overall trajectory. 

Active investments means you're out there on your own - doing all the research, cherry-picking stocks yourself, and really owing the risk that you have to take.

This requires a lot of knowledge of the stock market, individual companies, and can be incredibly risky if you’re not sure what you’re doing. 

A mentor and a lot of research are both recommended for this approach.

However, for the passive investor, there are a lot of great options. S&P 500 index funds are a brilliant choice and come recommended by world-renown investors such as Warren Buffett. 

These funds offer long-term positive returns and have historically proven to be able to effectively recover from market crashes.

Now that you have a rough idea of the two approaches, decide which one you want to be, or have the time to become in the case of active investments. Remember, with investments, the younger you start, the better.

Invest with facts, not feelings. Beginners usually really too much on their gut feeling, and are too quick to liken investing to gambling or speculating when it's anything but. 

Your main task is to minimize the risk, and the only tool for that is research.

My best tip for beginners to get started with investing is to not over-complicate things. In fact, it's been shown that simplifying your investments can actually result in you earning more money over the long term.

This is actually something I apply myself with my own investments, through keeping the majority of my money in a broad market index fund that tracks the S&P 500. 

That is, while you may be tempted to buy and sell stocks over a period of weeks or months, this can actually be far riskier given that while these have the potential to go up, there's also a very good chance that they could go down. 

It also comes with added transaction costs, not to mention the time needed to manage your investments in this way.  Instead, I like to set and forget. 

By continuing over time to put your money in a broad market index fund (including not selling during drops!), your portfolio will be following the performance of a large number of companies. 

This, in turn, can be far less volatile than buying individual stocks. 

History has also shown that, overall, the stock market has gone up over time, so having your money somewhere that more or less follows this trend, rather than the ups and downs of individual companies, makes it much more likely that you'll end up better off by the time you reach retirement.

The first thing to do is to pay down any excess debt, especially from credit cards. That will likely get you a better return than the stock market.  

The next thing to do is make sure you are putting enough into your 401(k) to get your company’s match amount – that’s basically free money from your company! 

Then make use of Roth IRAs. You can open one up at most investment companies. Start with an ‘allocation’ or ‘retirement date’ fund that manages the stock/bond mix for you.   

Keep investing monthly so you get used to putting money aside every month and make use of something called ‘dollar cost averaging.’ 

Invest a consistent amount each month and if the market goes up you buy less shares at a higher price, but if the market goes down you buy more shares at the lower price. 

1. Start Slow - In general, it’s a good practice to spend a few weeks/months simply observing the market of the asset that you want to buy. 

For instance, if you want to invest in stocks then you should spend (at least) a month or so simply watching stock prices. 

This way you can see how stocks react to different types of information. This also lets you learn from any potential mistakes before actually putting your money at risk.

2. Don’t take on too much risk too fast - Speaking of risk, try to avoid taking on too much risk when starting out. This means avoiding margin (borrowed money), volatile assets, options, etc.

3. It’s okay to make money slowly 

A common beginner mistake is expecting that you need to double your money overnight. It’s important to understand that a good return is usually about 10% per year. 

If you don’t make a killing in your first week of investing, don’t get frustrated. Just trust your investing process and give assets time to grow in value.

My number one piece of advice for people new to personal finance and investing is - START NOW! I mean right now, as in today. I cannot stress enough how powerful time affects wealth. 

The money invested today starts earning money; that money then produces even more money.

The more time money is invested, the higher the exponential growth. 

This financial magic is called compound interest. Albert Einstein called compound interest "mankind's greatest invention," and that "he who understands it, earns it."

As a simple example, $100 invested today at 10% grows to $110 after one year. If the money stays invested, after two years, the investment equals $121. 

With no additional work or investment, the original $100 is now worth $11,739. The combination of Time + Compound Interest is the most powerful tool you have to build wealth.

My best tip for a beginning investor is to start as soon as you can. You will never be as young as you are right this second. That means that your investments have the maximum time to grow and compound if you start now.

You might not feel like you can start investing today for many reasons. 

Perhaps you are scared to start because you don’t know everything there is to know about investing. Or maybe you think that you should wait until all your debt is paid off to start investing. 

While those are valid feelings, delaying investing will only shrink the time that your money can compound and your total return.

For example, if you put $100 a month into an index fund that tracks the S&P 500 every month over the past 10 years, you’d have over $24,000 and would have more than doubled the money you contributed over that timeframe.

While there’s no wrong time to start investing, the sooner you start investing, the sooner your money starts working for you.

The biggest mistake that I see new investors make in regards to real estate is that they don't buy the property correctly. 

Most newcomers to the industry underestimate how competitive the market is and how difficult it can be to find a property that offers a good return on investment. 

Oftentimes new investors will become impatient during their search and pay too much for a property or they just don't know their (expected rent, expected repairs/cap-ex, expected vacancies, etc) numbers well and end up with a much lower ROI than they could get investing the cash elsewhere.

Some of the best advice I received in my early 20s was to start saving for retirement as soon as I enter the workforce. 

Though, before committing capital towards your retirement portfolio, it's important to create a well-defined investment strategy. 

The stock market is where a majority of people invest their money, but is that really the safest place for it? Part of your investment strategy should include diversifying your portfolio to protect it from market volatility.

Alternative assets, like agriculture, are typically negatively correlated to the overall stock market, acting as a great hedge against inflation.

Historically, agriculture has produced solid returns compared to other asset classes. 

If you want to consider the impact your dollars are making, investments in private agriculture deals can have an enormous positive influence on a family and community.

I like to follow the investment advice from Peter Lynch and billionaire investor Warren Buffett. You can search on YouTube to see their various interviews and learn a lot about Stock, ETF, and Mutual Fund investing.

My favorite takeaway from both of these experts is to invest for a period of 10-20 years or more. 

Also, Peter Lynch says to invest in companies competing in an industry you actively work in and have specialized knowledge with. 

Warren Buffett recommends investing in blue-chip companies with strong balance sheets.

For my own investment portfolio, I’ve personally followed both of these strategies and maintained an average return rate of 20%. 

If the overall markets level goes off or we have a recession, I’d expect that the average return to drop, however. That would then create an excellent buying opportunity for the next run-up in the coming years.

Pursuing a diversified, balanced portfolio will better protect you against over exposure to any one asset class. 

For more volatile asset classes, including crypto, it is important to ensure that the allocation of investment is sensible and that the potential risk of investment is offset by a greater investment in more stable asset classes, including real estate and equities.

By and large, allocating around 7% of a portfolio to crypto is appropriate, as is investing in the currency fractionally. 

Buying a whole bitcoin can be a rather large exposure for the average retail investor, so a trusted and regulated way to benefit from crypto is to trade it as a currency pair or via an ETP (Exchange Traded Products).

This offers a fractional investment approach that is fundamentally less risky than buying the currency. 

Additionally, in trading ETPs or Crypto FX pairs, there is no need for a crypto wallet, meaning you don’t own or store the underlying coins. 

This negates worries about crypto exchange hacks or losing access, which is important as stories of access to cryptocurrency wallets being lost to dramatic effect have been widely reported.

Building the remaining 93% of your portfolio you should look to incorporate:

• Equity
• Commodities
• Real estate
• Fixed income
• Volatility

There is no one-size-fits-all solution to investing, and doing your research is vital to ensure you make informed investment decisions. 

When it comes to volatile assets such as cryptocurrencies, balancing these within a diverse portfolio will ensure you are in an optimal position to reap the rewards, while minimizing your exposure to unnecessary risk.

Don't Fall In Love With A Stock

In the history of modern financial economics, the rationality of financial markets has been a contentious issue. 

There might be a handful of negative market indicators, yet many investors keep making the same mistake, investing in the same market until it’s too late. 

Your ego will get you on a revenge path, forcing you to make investment decisions against strong facts and common sense. The stock market is not for you if you lack a sense of humility and have a hard time accepting that you were wrong. 

Your experience or lack of experience doesn’t matter when facts change, and you need totally different skills to correspond to new conditions.

Ask yourself “What is this company’s reinvestment strategy?”

After you have put your dollar into a company monitor the reinvestment strategy of the company. A good company to invest in is the one that keeps putting money into their business, therefore multiplying investors’ profit. 

Detect real value stocks

Sometimes beginner investors tend to buy a small stock just to have a position. For some financial instruments, like cryptocurrencies, it works, in other cases, the stock value doesn’t justify the real value, so they look for other ways to gain value from that investment. 

Look not at the moving picture of a stock, not the snapshot of it.

And always remember that economic history is cyclic. Everything that happened before will repeat itself, both ups and downs.

My best investing tips for beginners are start early, be consistent, plan ahead, construct portfolios based on risk tolerance, and have conviction. 

The earlier you start the more time you give compound interest to work its magic. 

Investing regularly does two things: buys more securities so you have more to work with and gives you the ability to dollar-cost average if your investments are losing value. 

Assessing how long you’re able to let your investments grow is important as well – if you have time, you can be more aggressive and patient, but if you don’t, you need to be more picky and conservative with your investments. 

Which brings us to risk tolerance – figure out what amount of risky investments makes you uncomfortable, and determine what the risk/reward dynamic is. 

Do your due diligence, pick your investments, and then have conviction in your decision.

The first thing you should do is to determine what kind of investor you are.

Are you willing to take chances? Do you envision yourself being able to actively participate in the market multiple times per day? If this is the case, you may want to pursue an active investing strategy.

Active investing entails focusing on the present rather than the long term horizon. Active investors focus on specific stocks and use good market timing to try to outperform the market in order to profit mainly in the short term. 

It is necessary for an investor to constantly monitor the market and his position in it.

If you're a long-term investor, you're in it for the long haul. Passive investors reduce the amount of buying and selling in their portfolios, ensuring that their investment strategy is cost-effective.

This is essentially a buy-and-hold strategy. It is frequently necessary to resist the urge to react to or anticipate the stock market's constant movements.

Investing in an index fund that tracks one of the industry's major indices, such as the S&P 500 or Dow Jones, is the best example of a passive approach.

Have investment goals: to start investing, first, you need to set your goal of why and how long will you be investing for. 

For example, are you going to invest in order to make money for a vacation or are you investing for long-term purposes such as retirement? Having investment goals will keep you motivated and focused.

Diversify your investments: as you understand by the metaphor “don't put all your eggs in one basket” it is important to diversify your investments. 

If you take the example of the stock market, it is always fluctuating. So when diversifying your investment portfolio, there will be fewer chances of you losing all your money.