How you can get savvy about investing
As a financial advisor, I spend my days helping my clients make smart money decisions that will set them up to achieve their goals for the future. While a lot of what I do involves sophisticated strategies designed for more established investors, I also care deeply about helping the next generation take control of their finances early in life so they, too, can live out their dreams.
While investing can be an intimidating topic for those just getting started, it doesn’t need to be. If you’re new to investing, know that it all starts with financial literacy — understanding the basics.
Here’s a primer:
Study common investment terminology. The stock market is rife with complex concepts, so start by getting a grasp of the frequently used terms and concepts. It helps to understand the language of investing, from asset allocation to ETF and beyond. To break it all down, use an online investment dictionary that provides plain-English definitions of common investment terms, or ask your financial advisor to explain them to you.
Enroll in a class. Take advantage of free webinars, seminars or workshops on investing fundamentals. If you prefer learning in a classroom setting, look for basic courses on investing, how the stock market works or personal finance at a local college or university.
Follow the news. Start following the business and financial sections of your favorite media outlet to get a healthy dose of investment know-how. You’ll begin to understand the types of business activities that influence the marketplace — for example, oil prices or new housing starts — and gain an appreciation for what’s considered newsworthy. As you become more attuned to global markets, you’ll start to see the ripple effect of mergers and acquisitions, product innovations and even frontpage news stories — from natural disasters to general elections and terrorist events — on Wall Street confidence.
Watch investment programs. Public radio and television stations often feature investment programs aimed at new and seasoned investors. Even your local news channels may include a market segment. Be wary of infomercials disguised as informational investment programs, though.
Check out stock market apps. There are hundreds of apps available today focused on helping consumers understand investing. Before downloading an app, check the reviews and opt for those that have been vetted by trusted sources.
Track your favorite companies. To better understand the movement of individual stocks, pick several of your favorite publically traded companies to follow. Then, check their stock price, company newsroom and social media accounts each day. Tracking the stocks over time will help you understand how company announcements and actions, such as a product launch or comment by an executive, may affect the stock price.
Work with a financial professional. A professional can help you understand your investment options, and help you make financial decisions that are best for your individual needs. Work with someone who is willing to explain investment concepts and provide educational materials. Tell your professional about your desire to learn more about the market. He or she will likely be willing to send you news articles, add you to a newsletter or give you a call to discuss market news that may interest you.
Bronwyn L. Martin is a Financial Advisor Chartered Financial Consultant with Martin’s Financial Consulting Group, a financial advisory practice of Ameriprise Financial Services Inc. in Kennett Square and Havre de Grace, Md. She specializes in feebased financial planning and asset management strategies and has been in practice for 18 years. To contact her visit www.ameripriseadvisors.com/ bronwyn.x.martin
The stock market is rife with complex concepts, so start by getting a grasp of the frequently used terms and concepts. It helps to understand the language of investing, from asset allocation to ETF and beyond.