Investing For Beginners (Part 3)

Hi everyone, thank you for coming back to my blog. I hope you found my last blog interesting and useful, where I covered ‘Investing For Beginners (Part 2)’.

Today’s blog is going to be the final continuation of that, so without further ado, welcome to Part 3!

7. Watch out for high fees

Fees are the money you put into someone else’s pocket rather than your own. Regardless of how you invest, you are going to pay fees, but what you need to watch out for is high fees because they will have a significant drag on your returns. You need to consider the value you are getting in exchange for paying fees.

It’s well worth paying a fee for a professionally designed investment portfolio that can be adjusted as your life changes. It’s also handy to have features like automatic rebalancing (this makes sure your portfolio always contains the correct mix of assets). Some online investment platforms have a great combination of these services as well as low fees.

The last thing you want to do is overpay fees! If you are paying 1–2% in fees, you could lose up to 40% of your expected investment returns over time. As fees are so consequential, you should make sure that you are not overpaying for the service you are getting.

8. Make an investing plan and stick to it

One of the biggest reasons many investors have low returns is because they sell at the wrong time. They often base decisions on recent performance and look at what has been doing well or not so well recently. Many investors tend to buy things that have appreciated in value and sell things that have declined in value. This is not a clever investing plan!

Rather than do this, you should create a plan you think will help you reach your goals over the time period you have to invest. Don’t stop investing because of bad performance. Stick to your plan without buying or selling based on your opinion of what will happen in the near future.

If you are ready to put all these beginners investing tips to good use, then the next step is to find an investment platform, my personal preference is Vanguard because they have low fees and offer the most common type of index funds that are perfect if you are new to the investing game.

Until next time, thank you and stay safe.