Investment Resources

Among the variety of resources for first-time investors are banks, brokers, investment advisors, financial planners and websites such as NerdWallet or 

Another resource is your employer. Liu Liu, director of investment research and management at BOK Financial, says that often, employers provide retirement plans, which include a retirement calculator that helps keep on track with saving goals. Also, check out the financial wellness tools that assist in creating a budget, identifying goals and measuring the progress toward those goals, as well as evaluating your portfolios and insurance coverage.

“Additional resources include podcasts, books and even social media,” says Liu.

One social media resource she suggests is an online program by chief investment strategist Steve Wyett. Each week he posts a market roundup via LinkedIn that discusses an array of
 investment topics.

Save, Save, Save

The key to investing is to save; Sean Kouplen, chairman and CEO of Regent Bank, says that saving and investing go hand in hand.

“You can’t afford to invest without first growing your savings,” he says, “and without investing, your savings will be eaten by inflation over time.”

The first step, Kouplen advises, is to establish an emergency fund. This fund should be liquid, meaning that you can make a withdrawal any time without a penalty. The emergency fund should hold enough money to cover living expenses for at least three months. 

“A simple checking or savings account is a good option for your emergency fund,” he says.

Next, establish medium-term savings. This is your savings for large expenses over the next two to six years, for vacations, renovations or educational opportunities. These funds don’t have to be completely liquid, and you will want to earn a higher return than you’d get with a standard checking or savings account. 

“Consider investing in safer options like fixed income investments or conservative ETF [exchange-traded funds] portfolios,” says Kouplen.  

Step three is to focus on long-term savings, which is your money to rely on in retirement. This segment is for long-term investments using your 401(k) or IRA (Individual Retirement Account).

Things to Consider Before Investing

The prime investing advice that most financial professionals give, Kouplen says, is to diversify your investments.

“Basically, don’t put all your eggs in one basket,” he says.

Make sure you have diversity in the types of assets you purchase, the sectors in which the assets are tied to, and the geographic location of your assets. Also, invest in mutual funds or ETF portfolios, which are managed by professionals who use their expertise to capture the right balance of different assets from every sector of the economy.

“Some assets will go down and some will go up, but over time, the right asset mix should go up with much less risk than a single stock,” says Kouplen.

Another tip is to keep your fund costs low. 

Liu advises to examine income, spending, any debt, plus the cost of servicing those debts, emergency funds and any other financial obligations or goals in a holistic manner before investing.

“Investing should be considered as part of financial wellness for all of us,” she says.

Types of Investments

There are several investment types, or asset classes, to choose from. Rating the types of investments, from conservative to aggressive investments, Liu lists cash; deposit products and money market accounts or money market mutual funds; bonds, which are debt securities issued by governments and companies; fixed income mutual funds; stocks, meaning ownership of a company; equity mutual funds; and real estate investments, commercial and residential.

Many of the investment solutions in the marketplace can also be used, which take care of asset allocation and investment selection for you, she says. Do your research and don’t be afraid to ask for help.

“It is always great to reach out to a financial advisor as well,” Liu says.

Mutual funds, index funds, and ETF portfolios, Kouplen says, are options to keep your assets diverse. Since these are professionally managed, the asset types are varied, designed to protect you in different environments. 

“There are as many types of investments as there are stars in the sky,” Kouplen says.

And as you get more sophisticated, there are countless price investment options, including investing in private companies, commodities, price debt placement and commercial and residential real estate. 

“These options require specialized knowledge, but can generate enormous returns,” Kouplen says.

Investing At Different Ages

There are different levels of investing as it pertains to age and financial stability. Whether you are a college student with limited funds, in your early 30’s just starting a family, in your 40’s with a stable, established job or in your 50’s or older preparing for retirement, there are strategies that can fit your life. 

“Generally speaking, it is best to start investing early because compounding goes a long way in growing your assets,” Liu says. “However, it is never too late to start.” 

In general, Kouplen says, your investments should be more aggressive when you are younger and more conservative as you age. The markets, which will have ups and downs, tend to rise over time, meaning that the younger investors have more time to recover. However, if you are post-retirement, don’t invest in higher-risk options – because there may not be enough time for the asset to recover its value.

Red Flags

When listening to an investment pitch or reading about an opportunity, there are some red flags to watch for. Liu cautions that investments with a guaranteed high return that are unusual for the type of investment are a red flag. Also, be wary of vague language around fees.

Kouplen offers a few smart questions to ask the person presenting this investment opportunity: 

Does the person requesting the investment have their own money wrapped up in it?

Do they have experience in this type of investment?

How will they benefit if you invest?

What is the exit plan for the investment?

If the investment does not perform well, how will you get paid back?

He also alerts red flag issues including missing documentation; strategies that are overly complex; high pressure sales tactics; and incredibly high profits that are promised. 

“If it sounds too good to be true,” Kouplen says, “it probably is.”

Vocab to Know

Bear/Bull Market: A bear market is a prolonged period of falling stock prices. A bull market is any market in which prices are advancing in an upward trend.

Capital Gain vs. Loss: The difference between a security’s purchase price and its selling price, when the difference is positive, is a capital gain. A capital loss is the amount by which the proceeds from a sale of security are less than its purchase price.

Certificate of Deposit (CD): A savings account that holds a fixed amount of money for a fixed period of time, such as six months, one year, or five years. In exchange, the issuing bank or credit union pays you interest.

Diversification: The process of owning different investments that tend to perform well at different times in order to reduce the effects of volatility in a portfolio.

Dividend: A portion of a company’s profit paid to common and preferred shareholders.

Equities: Shares issued by a company which represent ownership in it.

Fund: A pool of money from a group of investors in order to buy securities.

Individual Retirement Account (IRA): A tax-deferred account to which an eligible individual can make annual contributions. There are several types including the Traditional IRA, Roth IRA, SEP IRA and Simple IRA.

NASDAQ: National Association of Securities Dealers Automated Quotations system. NASDAQ is a computerized system that provides brokers and dealers with price quotations for securities traded over the counter.

Stock: A long-term, growth-oriented investment representing ownership in a company, also known as equity.

Valuation: An estimate of the value or worth of a company – the price investors assign to an individual stock. 

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