Tips for the First-Time Investor

Q: I’ve never invested before, but I’ve been told it can be a really smart move, especially for someone in my financial situation (I was given a lump-sum payout in the divorce). Watching the market really makes me anxious, though—how can I invest without driving myself (or my financial planner) crazy?

A: It’s completely understandable to be hesitant about investing when you never have before! We’ve all been there at one time or another…even me! My rule of thumb (for most things!) is: If you get scared, get informed.

  • Trust your financial planner. If you’re here, then I’m pretty sure you’ve vetted your advisor, and if so, then trust that they know your goals and care about them. Without that trust, your relationship, like most, will be useless. Make sure you’ve got someone you feel has your back.
  • Check on your long-term investments (ONLY) once a month. If you start logging in more often, chances are you’ll tie some stress to the inevitable ups and downs of the market. It’s like weight loss: the day to day numbers aren’t important — it’s the numbers we see over time.
  • Create a safety net: If you find yourself apprehensive about investing, I suggest starting by “dipping a toe.” Create a “safety net” by putting aside several month’s worth of expenses in cash. You’ll feel more comfortable knowing that money is there if you need it, and it’ll give you the time to implement investments slowly.

Schedule a call with your financial planner and have a frank conversation. Tell them what your worries are. There’s a (very) good chance they’ve experienced this with other clients and have some solid ideas on how to keep your concerns at a low simmer, rather than a rolling boil.