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Starting an investment portfolio can be intimidating and overwhelming — which is exactly why many put off getting started. Millennials are opting out of investing at higher rates than any other generation. Driving factors include lack of accessible information, misconceptions about investment opportunities, and fear of losing money. As a result, many millennials are opting to save their money in a savings account instead of investing it.
The reticence about investing is understandable, since millennials had a front row seat to the devestating losses their parents suffered during the financial crises. But, as James Chen at Investopedia reports, today’s young adults also face the “most uncertain economic future of perhaps any generation in America since the Great Depression.” With job insecurity, wage stagnation, and a growing divide between the rich and poor affecting the chances for millenial future wealth, it’s more important than ever for young people to start investing their money. Here are some steps to help you get you started.
1. Pay yourself first…then leave your money alone.
The first step is building the habit of investing consistently, little by little — not just when you have some extra cash. Jeremy Delk, founder of investment firm Delk Entreprises, recommends budgeting a percentage of your monthly income to squirrel away. “Sock away a minimum of 20% of your income and put it in a separate account, ideally a different bank where it is hard for you to move money back,” he advises. That way, it’s out of sight, out of mind, and growing your investment.
When it’s hard to access your money, it gives your money time to work for you. Leaving your money alone for extended periods of time gives it a chance to rebound when the market drops.
2.Diversify your investment portfolio to minimize risk.
Even if you wholeheartedly believe in a certain stock or investment, do not put all your eggs in one basket. Diversify your portfolio to make sure you have multiple avenues to see returns. A good way to do this is through mutual funds with a financial advisor. But also consider other potential investment avenues, like startups or cryptocurrency.
You can also diversify your portfolio by picking investments with different rates of return and investing in foreign stocks. That way, even if many investments within your portfolio are doing poorly, you bolster your chance of performing well in other areas.
3. For passive income, consider real estate investment.
Real estate isn’t cheap, but if you have the funds at your dispoal, buying property is one of the best ways to diversify your portfolio. David Brim is cofounder of investment management firm Bright Impact, and he says his first real estate investment payed his rent and added “landlord” to his resume. “I started by investing in a duplex,” Brim says. “I lived on one side and rented the other, which covered expenses and gave me the experience of being a landlord. After moving out we automatically had another rental unit, which generated solid monthly passive income.” Additionally, real estate values generally appreciate over time. So in addition to earning rental income during your ownership, you’ll likely have the opportunity to sell at a higher price.
Alternatively, as opposed to buying a specific property, another great option is to put money in a real estate investment trust (REIT), which currently has an average annual return of 11.8%.
4. Check out financial experts on YouTube.
YouTube is a fantastic resource for beginning investors, with countless videos by financial experts who can explain the markets and tricks of the trade. Just be discerning about which experts are actually DOING the investing–with professional bios and personal stories to prove it– as opposed to “teachers” without obvious experience to back up their advice. Examples of renowned financial investment teachers include people like Dave Ramsey and Graham Stephan.
There are also many financial book summaries on YouTube, which rehash financial planning classics like Rich Dad Poor Dad and The Intelligent Investor. These summaries will help you get a grasp on key investing concepts without spending hours reading the whole books. Although, of course, actually reading the books will help even more!
5.Start ASAP!
Now that you know the basics on how to get started… make money moves! You are never too young and it’s never too early to start investing. In fact, the sooner you learn how to make your money work for you, the better. What all investors will tell you is to use time as your best asset, because a dollar today is worth more than a dollar tomorrow.
Of course, nothing is guaranteed, so it’s always a good idea to get a financial advisor, educate yourself on different types of investments, and diversify your portfolio to try different things, and see what works best for you. Despite the risk, investing rather than saving money yields worthwhile returns in the long run. The odds are worth the gamble, every time.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
