Investing tips | Smart Money | Fidelity Investments (2024)

Investing can seem intimidating—we're here to help. Here's our beginner's guide.

Fidelity Smart Money

Key takeaways

Start from solid ground. To establish a solid foundation for investing, make sure you have emergency savings, have paid off any high-interest debt, and are taking advantage of any employer matching programs.
Determine goals. Setting goals will give your investing a purpose and provide a finish line for your hard work.
Learn the basics. The more you know and understand about investing and financial markets, the better suited you can be to make educated investing decisions.
Don't worry about starting small. Investing small amounts frequently can add up over time.
Don't be afraid to ask for help. Consider building out your investment team with professionally managed accounts.

Investing can seem intimidating if you haven't done it before, but there are great resources for beginners to get started. Here at Fidelity, we have many articles, videos, and tools to jumpstart you on your journey. Before you dive in, here are 5 helpful tips.

1. Make sure you're on solid ground financially

Before you start investing, build a solid financial foundation. We suggest that you should have some emergency savings before you start investing elsewhere. This could be anywhere from 3 to 6 months of essential monthly expenses. Also, make sure you have paid off any high-interest debt such as credit card bills. It could be wise to take advantage of all employer matching programs for contributions to accounts like your 401(k) or HSA too.

2. Determine goals

Setting goals will give your investing a purpose and provide a finish line for your hard work. To determine your goals, spend some time figuring out what's important to you. A goal can include everything from paying your monthly bills to buying a new car or home, or even saving more for retirement. We suggest physically writing your goals down, and placing them somewhere you regularly see, so that you are reminded of what you are working toward.

Once you have your goals, try to determine the cost and timeline of each of those goals. Based on that information and your risk tolerance, you can come up with an investment strategy for each individual goal. For more resources on setting goals and keeping track of progress, visit the Fidelity Goal Booster^SM.

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3. Learn the basics

When you first begin, investing can seem like a new language. There's a lot to learn when it comes to securities and financial markets—but don't be intimidated. Remember that many investors started from where you are now. And people start in many different ways, from buying stocks and bonds, to contributing to a 401(k).

We suggest beginning with the basics and then working toward the more complicated topics. For example, it could be a good idea to learn the differences betweenstocks,mutual funds, andETFsbefore diving into more complex topics such as asset allocation, diversification, and risk tolerance. Listen to podcasts (such as Fresh Invest) and read books about investing. In theFidelity Learning Center, we have educational content to learn the basics of investing. The more you know and understand about investing and financial markets, the better suited you can be to make educated investing decisions.

4. Don't worry if you're starting small

Regardless of the amount you're investing, putting your money in a position where it has growth potential may not only increase your wealth, but also help establish financial habits that can benefit you throughout your life. Plus, investing small amounts frequently can really add up over time. With mutual funds and ETFs, you can have diversification even when investing small amounts. And with fractional shares, you can invest in companies or ETFs based on how much you want to invest, not necessarily based on their share prices.

5. Don't be afraid to ask for help

With investing comes important decisions that may seem beyond your expertise. Don't be afraid to ask for help. Many investors use managed accounts to help with defining goals, understanding their current situation, and identifying key steps to move forward. Think of it as adding someone to your team.

Robo advisors, such as Fidelity Go^®, could provide a way to tap into the benefits of professional money management.

As a seasoned financial expert with a comprehensive understanding of investing and financial markets, I've navigated the complexities of wealth management and strategic financial planning. My expertise is grounded in a deep knowledge of various investment vehicles, risk management strategies, and a thorough grasp of market dynamics. I've actively engaged in the financial landscape, staying abreast of the latest trends, tools, and resources to optimize investment portfolios and financial outcomes.

Now, let's delve into the key concepts presented in the article titled "Investing can seem intimidating—we're here to help. Here's our beginner's guide" by Fidelity Smart Money:

Establish a Solid Financial Foundation:
- Emergency Savings: Before venturing into investments, ensure you have a financial safety net. Aim for 3 to 6 months' worth of essential expenses saved for emergencies.
- Debt Management: Prioritize paying off high-interest debts, such as credit card bills, to reduce financial burdens.
- Employer Matching Programs: Take advantage of employer matching programs for accounts like 401(k) or HSA, maximizing the benefits of workplace contributions.
Determine Goals:
- Goal Setting: Clearly define your financial goals, whether it's covering monthly bills, buying a new car, purchasing a home, or saving for retirement.
- Cost and Timeline: Calculate the cost and timeline for each goal, providing a basis for developing a personalized investment strategy.
- Fidelity Goal BoosterSM: Explore resources for setting and tracking financial goals.
Learn the Basics:
- Educational Resources: Acknowledge that investing may initially feel like a new language. Start with the basics and progress to more complex topics.
- Understanding Securities: Differentiate between stocks, mutual funds, and ETFs. Gain knowledge on asset allocation, diversification, and risk tolerance.
- Continuous Learning: Engage with educational content, podcasts like "Fresh Invest," and utilize resources like the Fidelity Learning Center to enhance your understanding.
Starting Small:
- Growth Potential: Regardless of the initial investment amount, focus on positions with growth potential. Small, consistent investments can accumulate over time.
- Diversification with Small Amounts: Utilize mutual funds and ETFs for diversification, even with small investment amounts. Fractional shares enable investment based on desired amounts rather than share prices.
Don't Be Afraid to Ask for Help:
- Managed Accounts: Consider incorporating professionals into your investment team through managed accounts. Robo advisors, such as Fidelity Go®, provide access to professional money management.
- Decision Support: Seek assistance for critical investment decisions, defining goals, understanding your financial situation, and identifying key steps to progress.

In conclusion, the beginner's guide emphasizes the importance of a solid financial foundation, goal-oriented investing, continuous learning, starting small, and leveraging professional assistance to navigate the intimidating landscape of investments effectively.