Investing For the First Time: What to Do in a Shaky Market

Posted December 20, 2009 by Bernz

The past year has represented one of the most volatile and risky eras in investment history in the United States, especially in the stock market. For those with existing investment portfolios, watching the decline in market value every day has been demoralizing. Retirement asset values have been slashed and many investors are wondering if they will even be able to afford to retire.

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But what do you do if this is the very first time that you are investing? You may be just graduating from university or trying to put away some money for your children’s college tuition. How can you ensure that you make good decisions in this shaky economy?

1) Find the right advisor. An effective investment advisor knows the current state of the market and can help you understand the risks and rewards of each of its sectors. Choose an advisor who does not earn income based on how much or what types of investments you buy. Your investment advisor should also be experienced. This recessionary financial market is no time for you to try out a wet-behind-the-ears advisor.

2) Don’t invest all your money at the same time. With the uncertainty in the markets today, it is wise to invest small amounts at a time and keep some cash back to protect your capital. The market can turn up or down at a moment’s notice and investing at intervals reduces your risk of following the market down.

3) Invest in different market sectors. This is the same advice as the age old “don’t put all your eggs in one basket”. It is especially important in the current market to diversify. That way, if any one market sector tanks, you have assets working in other sectors to make up for it.

Investing for the first time can be scary at any time, but even more nerve-wracking with the roller coaster market of 2009. Getting the right advisor on board and taking your time to place your investments can help you make the best of today’s investment arena and position yourself for growth in the future.

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This entry was posted on Sunday, December 20, 2009 at 9:18 pm and is filed under Investing Basics, Investing Strategies, Stock Market Investing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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