Getting Started In Investing: Creating a Playlist for Beginners

There are many different ways to invest in the stock market. You can trade stocks, buy mutual funds, or purchase prepaid variable annuities. But before you start investing, make sure you have a plan. This is what your portfolio should include: • Stocks for long-term growth • Bonds for stability • International stocks to diversify your portfolio • Mutual funds for passive management.

What is investing?

This term refers to the purchase or sale of an asset, which in this case, is stocks or bonds. There are many different ways to invest in the stock market, from buying individual stocks to mutual funds, prepaid variable annuities, or ETFs. Before you start investing, make sure you have a plan. This is what your portfolio should include: • Stocks for long-term growth • Bonds for stability • International stocks to diversify your portfolio • Mutual funds for passive management Here is an easy way to create a playlist for beginners. You’ll want to first select the “repertoire” or stocks or bonds you want to add to your portfolio. You can use a tax-advantaged account or your brokerage account to invest in stocks.

Why invest?

To be honest, investing is not really something anyone wants to do. There are very few people that are “accustomed” to the idea of owning and managing other people’s money. That’s why it’s essential to take the time to learn about how to invest. You’ll be much better off in the long run. Finding a great way to invest is not difficult. It really only comes down to time and effort. If you know what you’re doing, you can find a great place to get started. To help you in your research, I’ve listed some of the best places to invest below: Get Paid to Own Stocks Many individuals claim that it’s difficult to get paid to own stocks. You hear all the stories about how hard it is to get any interest on your savings account. But I say, “Why not?” Stocks are a powerful instrument to your money.

Portfolio

Your portfolio needs to include the following components: • Stocks – You will want to choose stocks that pay dividends, are proven, and have strong corporate reputations. • Bonds – Invest in bonds for security and income. The best bonds are those with a low duration (the duration is the period of time the bond will pay you before it matures). Also, seek out bonds with higher yields. • Mutual Funds – Choose funds that are appropriate for your retirement income needs. • Prepaid Variable Annuities – These are insurance products designed to cover payments during the year when your income will be lower. You purchase the insurance to avoid possible risks that could cause you to miss out on your planned retirement income.

Stocks

The stocks you choose to invest in can have a significant impact on your investment. They can be high risk or very low risk. They can raise or fall dramatically and move your entire portfolio with them. By choosing individual stocks, you are opening yourself up to much more risk, so you must use caution and research thoroughly before making an investment. I recommend stocks because the volatility of the stock market is usually much lower. For many investors, the best stocks are those that are in the consumer sector, and for that reason, I’m going to go with Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT) for my core stock holdings. The reason I have chosen Amazon is because its a great company and its stock price keeps rising.

Stocks for long-term growth

You want stocks that will hold up for many years, so you don’t have to worry about what’s going on in the stock market right now. But even if the market is falling, stocks can still produce a steady yield because there is always cash in the company’s bank account to pay dividends. Here are some stocks that should serve as good long-term investments: • Apple Inc. (NASDAQ: AAPL) — The stock is a long-term investment that’s worth the risk because Apple is growing in so many areas. • Microsoft Corporation (NASDAQ: MSFT) — A market giant with low costs and lots of potential for growth. • Berkshire Hathaway Inc. (NYSE: BRK-B) — Warren Buffett is the best investor in the world, so a portion of his company’s profits is available for shareholders.

Bonds for stability

Stocks for long-term growth The markets are dynamic. Unless you’re a fortune teller, there’s no telling where the market will go. Some investors stay fully invested for the long term. They buy and sell stock based on certain catalysts, like earnings. However, others stay fully invested, and that’s not a bad thing. If your portfolio is heavily invested in the stock market, you will be hurt by the current volatility. With the Dow up over 500 points on Tuesday (February 5), your portfolio will likely be down over the last few days. But if your portfolio was mostly in safe bonds, you would likely have missed the big jump. So you must be flexible. As long as your asset allocation is balanced, your asset allocation will be more than fine.

International stocks to diversify your portfolio

If you are investing for the long term, international stocks are a great option. However, before choosing international stocks, you should understand what type of risks you are willing to take. According to Investopedia, “International stocks are less correlated to the US stock market than domestic stocks because of less international trade between the two countries. This increased diversification makes international stocks a safe and stable choice, especially in the wake of the 2008-2009 recession.” While you can invest in international stocks without taking on these risks, there is no telling whether you will do well or fail.

Mutual funds for passive management

These passive mutual funds can be some of the most valuable tools you can use. They’re funds that track certain indices or indexes of your choosing. Typically, these passive funds invest in the stocks of larger companies, so your money is spread throughout the market instead of concentrated in a few or few dozen stocks. You can find passive mutual funds by typing “passive” into your favorite search engine. Stocks for long-term growth One of the advantages of investing in stocks is that you can hold them for an extended period of time. But, with investing, you never know when the stock market will decline. This is especially true when you’re investing for long-term growth.