You’ve been thinking about investing in the stock market, but still don’t dare take the leap? 2020 should be the year to finally do it. Most people are hesitant to invest out of fear because there are so many options to choose from. Online investment tools can make this task less daunting.
Best Investment Tools
Experts recommend novice investors use online investment advice services to manage their accounts. Of all the ways to get started investing, this one is the easiest. These services are also known as robo-advisors.
An investment calculator can prove pivotal in the context of investment services. You can use one to calculate a specific investment parameter plan. The tabs represent the parameter you want to find. For instance, the tab “Return Rate” will show you the return rate you need to reach an investment target.
Robo-advisers and calculators do a nice job of investing savings for a down payment on a big purchase, like your first home. They can also help you focus on a goal like creating an emergency fund. A lot of first-time investors make the mistake of diving in and beginning to buy stock without determining how the funds will eventually be used. The investment approach should be based on a clear goal for the funds.
Investment Apps
Investing apps like Stash and Stockpile offer investment by fractional share, letting investors buy an EFT or stock portion rather than the whole unit. If you have only a limited amount of money, this is a great option because it allows you to invest everything into the market.
Watch the Fees!
Whether you’re investing via brokerage services or using a robo-advisor, you need to be aware of how much the investment is really costing you. More than 30% of investors in the U.S. believe their brokers are not charging fees according to a 2018 survey. In fact, most of them are, and these fees add up. Often, they will cut into your investment returns in a major way.
Robo-advisors offer easy to follow formats among other helpful tools. However, you should know that you are paying an average of 0.75% of your assets for the help to set up and manage your funds. If you eventually learn to accomplish this by yourself, you will save these fees. ETFs have an expense ratio of 0.44% on average, which is the relative lowest.
Final Thoughts
A 2019 survey of over 8,000 U.S. adults by MetLife showed that approximately 55% were not participating in the stock market. The tendency to opt-out was much more pronounced among people under 34. Don’t be like them – opt to invest, but be aware of the conditions, the fees, and the right tools to help you.