Best investment strategies for beginners can be learned in the face of economic uncertainty like now. Investing properly can also save you from being too dependent on work because you will have passive income. For long-term goals and living peacefully in old age, here are beginner-friendly investment strategies that can be considered.
List of Best Investment Strategies for Beginners
- Dollar-Cost Averaging
Investment beginners may not be too confident in investing most of their money because they’re still learning. Anxiety and doubt about the risk of losing money are one of the reasons to be very careful. However, through the dollar-cost averaging strategy, you can invest small amounts without worrying about big losses.
DCA prioritizes regular and routine money investment, for example every month, regardless of the market price at that time. This is simple for beginners because you don’t have to bother waiting for the price to go down or up. DCA is a strategy that makes it easier for you to invest without having to worry about short-term market fluctuations.
- Buy and Hold
Most successful investment strategies for beginners include Buy-and Hold strategy because it’s about buying stocks and holding them. This also applies to other investments where you just buy and then leave them for a long time. You don’t have to sell them again in the near future even if the price goes up or down.
Instead of checking the stock price every day or every week, you just leave it and wait for years. Hopefully, the company will grow and its stock price will increase over time without worrying if the price drops. You believe that this investment is for the long term so the investments will grow even though sometimes it’s unstable.
- Income Investing
The main goal of income investing is to get a steady income from the investments you have. It’s not about just hoping that the asset price will rise, one of the examples is dividend stocks. As a beginner, you can buy shares of a company regularly paying dividends and get money from the paid dividends.
Investment strategy example that many people like is income investing because they get passive and steady income from investments. This strategy can be your additional option if you already have other investments that have higher risks. The great thing about this strategy is its stability and lower risk, suitable for people wanting a regular income.
- Buy Index Funds
Another strategy that is suitable for beginners is buying index funds because you have a diversified and low-cost investment. This strategy is also a long-term investment without you having to bother choosing stocks one by one. All you need to do is just buy one product and let time work, waiting for the money to grow.
The advantage of the buy index funds strategy is automatic diversification which means you already have a diverse portfolio. The management fees are lower than active mutual funds so you don’t need to worry about losing your money. Aside from the long-term investment, you just need to choose the appropriate index fund, buy, and let the investment grow.
- Reinvesting Profits
Recommended best investment strategies for beginners is by reinvesting profits which means you reuse the profits earned from investments. The profits are reused to buy more stocks or mutual funds to accelerate the growth of your wealth. This strategy is a faster way to grow the profits from the investments and will turn great if there’s consistency.
The reason why many beginners also consider this investment strategy is because of the compounding effect, letting money “work harder”. Reinvesting means not letting your money just sit there, the longer of the investment means the bigger profits to come. It’s also considered as passive income since you only spend the money from the investment profits.
- Index and a Few
Beginners must want safer investment, but with index-of-a-few of strategy you can still explore other stocks safely and flexibly. The focus is investing in index funds to be stable, but you may add a few other selected stocks. However, make sure the other stocks have a bigger potential so you can get additional profits if they’re big winners.
Best investment strategies for beginners are ones that are simple and profitable but the security and flexibility are guaranteed. Because beginners are still learning a lot, use the most efficient strategy without higher risk of losses. So, which strategy do you want to learn and try this time?
