Quote:
Originally Posted by CroFlames
But how do I learn how to invest wisely?
Can someone teach me?
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There's a lot of factors and there's no right answer. How you invest is going to be based on how you want to invest.
The best teacher is experience. I'd suggest taking a small amount (maybe one thousand dollars), buy into something you think will be around in 10 years time and start paying attention to that stock. Once you feel you've figured out how it all works (takes a few weeks reading articles, following stock price trends etc.), decide if you want to do more. My friend did this and after a few months she said she began understanding investing conversations more.
I'm no expert, but IMO from the point of view of someone not in finance, some of the first things you need to ask yourself are:
- Do I want/need an investment advisor paying attention to my finances? I personally do my own.
- What is my risk tolerance? How much am I willing to lose? Dollar amount, percentage etc.
- Diversification. If one thing falls, others (theoretically unaffected) prop up the portfolio. It's a way to mitigate risk. Options for diversification include: collectibles which will appreciate in value, property, stocks in different industries, bonds, mutual fund GIC etc.
- Expectations. I only mention this because of people getting caught up in bad investments. If someone promises you good returns with ZERO risk, always be wary. If it's too good to be true, it probably is.
- Time frame. When will you need the money? 1-2 months, 1-2 years, 5+ years etc.