Investing for Beginners 

Investing is one of the best ways to secure yourself financially and if you know what you’re doing, you stand to gain a lot. 

Investing for beginners can be an anxiety-filled endeavor, but many investment options are simpler than you think.

Here are 10 great ways to start investing as a beginner investor.

Investing in Stocks

Investing in stocks is the most popular method of investing for beginners and experienced investors alike. If you’ve got a favorite company or business, stocks can be a great way to invest. 

Gold coins stacked from left to right that are increasing in height representing the performance of the stock market

Image source: Pixabay

They are riskier than bonds and mutual funds because you are completely dependent upon the performance of the company, but they also offer higher rewards if the company does well.

Investing in Mutual Funds

Mutual funds pool together a group of stocks or bonds that are usually managed by a person, team, or index. In addition to stocks, investing in mutual funds is a great way to start investing as a beginner investor.

For a beginner investor, mutual funds are typically considered to be a safer investment than stocks because you are not depending on one single company’s performance. 

However, their level of risk ranges depending on the investments they hold. 

Investing for Beginners – Exchange Traded Funds (ETFs)

ETFs are essentially mutual funds that are traded like stocks.

They give a beginner investor the ability to buy and trade mutual funds in real time, which adds an element of control that mutual funds do not have. 

Just as with mutual funds, there is a wide range of ETFs. 

Some of the most common ETFs are index funds (the S&P for example), industry-specific funds, high-dividend yielding funds, or company-size funds (small business companies for example).

Investing in Bonds

Most beginner investors do not start out investing in bonds.

One reason for this is because bonds are more complex products to understand than stocks.

Bonds also have a lower rate of return.

A silver briefcase filled with one hundred dollar bills representing the performance of a diverse investment portfolio that include bondsImage source: Pixabay

In essense, bonds are loans that are paid back to the investor with interest.

All publicly traded bonds fall on a rating scale that rates how risky that particular bond is.

The highest rated bonds are usually the least risky and are considered to be one of the safest investments.  

However, these bonds also usually carry the lowest interest rate (which is the money you stand to profit).

Although bonds are not a top choice for new investors, they can be added to your portfolio to diversify your overall financial risk.

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Investing for Beginners – Real Estate

Investing in real estate can be both a safe and risky endeavor. Typically, the shorter the term of the real estate investment, the riskier the investment is. 

Investing in real estate usually requires a large initial investment, which deters some new investors, but may be an attractive investment for homeowners that hope to rent out their property.

Investing for Beginners – Businesses

Investing in businesses can be a risky venture, but also a profitable one for new / beginning investors.

Depending on your contractual obligations, business investors are sometimes active participants in the management of the business, but can also act as silent investor if they want to remain hands off. 

Investing for Beginners – 529 College Fund

If you’ve got children, then a 529 College Savings Plan is an investment vehicle that should find its way into your portfolio as a beginning investment for new investors.

These plans are operated by the government and offer great tax incentives as a way to support saving for college.

If you’re going to help your kids pay for college anyways, then this is a great way to get more bang for your buck.

Investing for Beginners – Retirement Account

A retirement account is possibly the most common type of investment vehicle and is recommended for new investors. 

Depending on the plan, there are different restrictions and tax implications. 

Most retirement plans are made up of a mix of bonds, mutual funds, and stocks, but you usually have the opportunity to decide that for yourself. 

Most retirement accounts have rules regarding when you are able to begin withdrawing your money (usually dependent on your age).  

Here are examples of the most common retirement option choices for investing as a beginner investor:

•    401k Plan – These plans are sponsored by employers and often come with a company matching plan.
•    Roth IRA – Roth IRAs are Individual Retirement Accounts that are taxed the year you make a deposit, allowing you to make withdrawals (when you reach the eligible age) tax free.
•    Traditional IRA – Traditional IRAs are Individual Retirement Accounts that are deposited tax free, and instead are taxed when you withdraw them in retirement.

Investing for Beginners – Gold 

Gold is a great way of investing for beginners because it is straightforward and tangible – you purchase gold with the hope that the value will go up. 

Investors have the option of actually purchasing and holding their own gold, or purchasing and owning it virtually. Gold is considered to be a safer investment.

Certificates of Deposit (CDs)

CDs are one of the safest investments, but also can be one of the lowest returning investments. Purchased through a bank, a certificate of deposit will give you a predetermined return on your investment with the agreement that you will not take your money out for an agreed on period of time.


There are many ways of investing for beginners and luckily you don’t need to limit yourself to just one way. 

Educate yourself on your investment of choice and make sure you know what you are getting into. 

Every person’s portfolio is unique, so enjoy the process of picking the perfect investments for you.

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