Investing can feel quite intimidating, especially when you’re just starting out.
In America, the market offers various opportunities for beginners, with accessible investments and tools that simplify the process.
Before you begin, understand the main types of investments and learn how to develop and align your financial strategy.
This guide provides a complete overview for those looking to take their first steps in the world of investing.
1. What to Consider Before Investing
Start with a thorough analysis of your financial goals, including timelines and risks, to help define and influence your decisions.
Assess your risk tolerance, as some people prefer safer investments, while others are comfortable with higher risks.
Additionally, it’s recommended to have an emergency fund covering at least three to six months before investing, ensuring greater security in case of unforeseen events.
2. Main Types of Investments in the U.S.
The U.S. offers a wide variety of investments, each with its own characteristics. Here are the key ones:
Stocks
Stocks represent ownership of a fraction of a company. When you buy a stock, you become a shareholder and can profit from price appreciation and dividend payments.
Investing in individual stocks can yield high returns, but it also carries considerable risks, even with strong companies like Apple (AAPL), Microsoft (MSFT), and Tesla (TSLA).
Index Funds and ETFs (Exchange-Traded Funds)
Index funds and ETFs are ideal for diversifying with lower risk, acting as baskets of investments that track specific indexes, such as the S&P 500 (SPY, VOO, IVV), Nasdaq-100 (QQQ), and Russell 2000 (IWM).
ETFs can be bought and sold like stocks, making them a flexible and cost-effective option for beginners.
Treasury Bonds and Corporate Bonds
Bonds offer predictable returns, including Treasury Bonds issued by the government, short-term Treasury Bills (T-Bills), and Treasury Inflation-Protected Securities (TIPS), as well as corporate bonds issued by companies.
Real Estate Investment Trusts (REITs)
REITs allow investors to gain exposure to real estate without directly purchasing properties. They generate passive income through rental earnings and distribute most of their profits to shareholders.
Some examples include:
- VNQ (Vanguard Real Estate ETF)
- O (Realty Income Corporation)
- SPG (Simon Property Group)
Cryptocurrencies
Cryptocurrencies are a highly volatile form of digital investment. Some of the most prominent include:
- Bitcoin (BTC): The most well-known and widely adopted.
- Ethereum (ETH): Recognized for its smart contract technology.
- Altcoins (Solana, Cardano, Polkadot, etc.): Diverse options with various technological applications.
While cryptocurrencies can generate high returns, they also come with significant risks. It’s advisable to allocate only a small portion of your portfolio to this market.
That’s why it’s important to be very cautious with cryptocurrencies, especially to avoid investing unsafely in less reliable ventures.
3. Choosing a Brokerage
To start investing, you need to open an account with a brokerage firm. Some of the most popular in the U.S. include:
- Robinhood: Ideal for beginners, with no trading fees.
- Fidelity: Offers diverse investment options and educational support.
- Charles Schwab: Provides excellent tools for investors of all levels.
- Vanguard: Specializes in low-cost index funds.
There are many other great portfolio options to start investing, and you need to do thorough research to find the one that fits you best.
4. Building a Balanced Portfolio
Diversification is key to reducing risks. A common strategy includes:
- 60% in stocks and ETFs (for long-term growth).
- 30% in bonds and fixed income (for stability).
- 10% in alternative investments (REITs, cryptocurrencies, etc.).
For those seeking greater security, the allocation can be adjusted with more government bonds and fewer high-risk assets.
In any case, everyone will create their own strategy, considering other life expenses such as insurance and emergency funds.
5. How to Overcome the Fear of Investing
First and foremost, you need to study and learn how to use the right tools.
Beyond the technical aspects, it’s crucial to set clear goals, choose investments that match your profile, and maintain a disciplined strategy.
Investing is a long-term process, and consistency is the key to building wealth safely and effectively.