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The Beginner’s Investment Guide To Staying Sane

This isn’t just any investment guide. This is a guide that will bring some Zen to the sometimes tumultuous world of investing.


This isn’t just any investment guide. This is a guide that will bring some Zen to the sometimes tumultuous world of investing.

Look at Google for an investment guide, and you’ll get over a billion results. While it’s true that we haven’t read through all of them, we’ve read enough that we can tell you there’s every imaginable take out there on learning to invest. Some guides will take you through the mechanics of what to do, some offer broad advice on money management, some are for college students, and some are for investors with limited funds.

Honestly, it can all be pretty confusing. There are all kinds of new terms specific to investing, such as stocks, shares, dividends, market caps, shorts, and so on. There seems to be very little rhyme or reason to why stock prices go up or down or even why they’re priced how they are.

Here’s the good news. You don’t need to know all of that. Not right away, at least. It’s good to learn as much as possible so you can invest with more confidence and gain an understanding of how your money is working for you. But for a new investor, an investment guide should walk you through the basics, tell you how to get started, and give you a good idea of what to expect without making you pull your hair out and give up in frustration. That’s what, hopefully, this guide will give you.


A simple investment guide for getting started

That first step truly is the hardest. But thanks to the World Wide Web, it’s now easier than ever to start investing. There are a lot of online brokers who want your business. Because of that, many of them try to make the process as easy as possible.

Gone are the days of a minimum balance, commissions on trades, and minimums for orders. Investopedia and NerdWallet both offer in-depth comparisons of several online brokers. They all have particular selling points; some allow cryptocurrency investing, others specialize in retirement accounts, and so forth.

You’ll need some form of ID, as that’s required by law, and you’ll need to provide a link to your bank account so you can fund your investing account. Otherwise, signing up for an account isn’t that much different than subscribing to your favorite investment newsletter (like ours!) or a monthly coffee delivery service.

Cutting through the weeds and choosing investments

When you first start investing, keep it simple. For as many ways as there are to make money in the stock market, there are more ways to lose money. Don’t let that scare you, though. Individual stocks and ETFs (more on these in a moment) are about as simple as it gets for investors.

You can read more about individual stocks here, but essentially that means you buy stocks in a particular company, like Coca-Cola (KO) or Apple (AAPL). An ETF, or exchange-traded fund, is more like buying a sample pack. You get a basket of any number of stocks. An ETF can be very generalized with a mix of stocks that mirrors the overall market, or you can buy specialized ETFs that concentrate on a theme, such as the iShares Global Clean Energy ETF (ICLN), which, as you can guess, focuses on clean energy.

Still, with a few thousand stocks to choose from, where do you start? Here are five investment guide ideas we’ve offered over the years that are proven to work.

1. Buy stocks of famous companies. Big, famous companies’ stocks are generally less volatile than small companies’ stocks. Volatility is scary! You might own shares in a very healthy, growing company, but the share price can fall 20% fairly easily during a normal stock market correction. When that happens, it helps to know that you own a piece of FedEx Corp (FDX). You can remind yourself, FedEx is not going out of business. The delivery guy is literally parked on my street right now! Read the rest of Getting Started with a $10,000 Stock Portfolio here.

2. Be patient. Wait for the right time to buy. Patient investors are the best prepared when opportunities emerge. Because of market turbulence, stocks of great companies become available to trade at very cheap valuations. This doesn’t mean buy stocks and forget about them! Tracking performance is critical, and so is getting out when necessary (when your stock is overvalued or trouble is on the horizon). Read the rest of The Warren Buffett Stock Picking Formula You Can Start Using Today here.

3. You don’t need a lot of money to start investing. It’s easy to get the impression that investors are already wealthy. They put thousands or tens of thousands of dollars into startups, IPOs, and hot new stocks that make them more and more money. The fact is, you don’t need very much money to start investing. Even $25 is enough to get started. Read the rest of Ideas for Investing Small Amounts of Money here.

4. Keep it simple. Individual stocks and ETFs aren’t your only options for investing. Other investments, such as options trading and day trading, can be attractive. Just beware. Even though it’s possible to make good money with these, there’s also a lot of potential to lose money faster than you can say “Beetlejuice” three times. Seriously. Come back to them once you have some experience and have a good idea of what your risk tolerance is. Read more of 3 Different Investment Options for Beginners (and 4 to Avoid) here.

5. Sign up for a daily email of investing advice. Naturally, we’re biased about which one you sign up for. If you sign up with us, you get a free special report and our free newsletter, Cabot Wealth Daily, with stock recommendations, tips, and investment advice. Or you can read and download our free report, How to Invest in Stocks and Other Investing Basics, and check out one of our upcoming webinars (also free). We also like Investopedia for their tutorials and articles broken down by investment level and style, such as Beginners, Active Traders, and Retirement.

If you’re still feeling confused, read through our site. There’s a wealth of free, helpful information about everything from setting up a portfolio to specific stocks ideas for beginners and even more advanced subjects, like technical analysis. And if you need help finding the best stocks, subscribe to any one of our 15 investment advisories, where our analysts routinely pick winning stocks and options trades that beat the market year in and year out.

Do you have any tips or ideas to include in an investment guide that could help clear up any questions? We’d love to get your feedback in the comment section below.

Cabot Wealth Network