For a long time, investing scared me because I believed that in order to do it properly, you needed to spend hours researching stocks. When I was younger, I didn’t have the time — or, to be honest, the interest — to do so, so I mostly avoided investing.
Fortunately, I eventually picked up strategies that helped me to start trading without having to spend hours trying to figure out how to read complicated stock charts. Here are some of my favourite suggestions.
#1. Make Use of a Robo-Advisor
For busy investors, robo-advisors are handy alternatives. You can pick one of the best robo advisors UK, set up an account, and complete a series of questions about your investment goals and risk tolerance. The robo-advisor will then use this data to construct an investment portfolio for you.
It’s an easy, automated method to get started investing, but it’s not without flaws. Because you’ll owe an advising charge on top of your investing costs, you may wind up paying more in fees than if you choose your own assets. When evaluating robo-advisors, keep these expenses in mind as well as their investing options to determine which one is best for you.
Because these portfolios don’t automatically alter your asset allocation over time, you’ll need to remember to complete the robo-advisor questionnaire again or manually adjust your asset allocation.
That’s not to say you can’t invest effectively with a robo-advisor; it just means you need to be aware of the drawbacks so you can determine if it’s the best option for you.
#2. Consider Investing in an Index Fund
For individuals who don’t have the knowledge or time to pick their own companies, index funds can be an ideal option. They’re a group of stocks that you buy together, and they’re made up of the same stocks as the index they’re supposed to replicate. S&P 500 index funds, for example, own equities from all 500 firms in the S&P 500 index.
Many investors choose them because they allow you to diversify your portfolio fast and economically. You receive a modest ownership in hundreds of different firms in various industries right away, so no single company has a significant impact on your portfolio. Fees are often minimal as well. The top S&P 500 index funds will only charge you $3 per year for each $10,000 you invest.
It’s difficult to forecast the actual return on any investment, but S&P 500 index funds usually provide returns that are extremely similar to those of the S&P 500 itself.
#3. Automate all your Contributions
It can be helpful to automate your contributions, whether you use a robo-advisor, invest in an index fund, or try your hand at choosing your own stocks. Many brokers now allow you to link your bank account to your investing account for automated transactions. You have complete control over when and how much money you contribute, as well as the frequency with which you modify your automatic contributions.
If you want to make sure this works for you, you must always have enough money in your bank account. To avoid any delays, consider making your payments after you receive your monthly paycheck.