Ask Matt: So, how do I get started investing?
— -- Q: Are there online tools or resources to help beginning investors learn what to do?
A: If someone handed you a tennis racket for the first time, would you know what to do?
If you've ever tried to learn something new, you know that it can be intimidating at first. With investing it's the same thing, if not even more so. There are so many aspects of investing that it's impossible to cover everything here. Additionally, there are no pat answers to your questions because there are different approaches to investing, all of which require a different sort of education.
One place you can start is by looking at my summary " How to Get Started Investing Online," which is a free excerpt from one of my books, "Investing Online for Dummies."
But that's just a start. Getting educated is an ongoing process. And the path you take depends largely on how you answer the following questions:
1. Do you want to be an active or passive investor?
Do you think that if you study hard enough that you can beat the market? If so, you're an active investor and can find trading tools and tips at nearly all the online brokerage firms. Do you want to be a passive investor, who invests in a diversified portfolio of stocks and just tries to get market returns? If so, there's excellent information at Vanguard founder Joh n Bogle's web site and at Index Funds Advisors.
2. Are you investing for a specific goal?
If you're saving your money for a particular objective, there are specific things you need to know. There are dedicated sites for college savings, for instance, including http://www.savingforcollege.com/. If retirement is your objective, Bankrate has some useful tips.
3. Do you want to invest yourself?
Some people don't have the interest, time or know how to invest on their own. These investors might consider mutual funds. The top mutual fund companies all contain information on how to use mutual funds to reach goals. And if you're interested in hiring someone to help you, the Certified Financial Planner Board has a Web site.
Keep in mind that you're never really done learning about investing. As you try things, you can experiment using paper trading provided by firms like TradeMonster.com. This system gives you virtual money, which you can use to practice before risking your own real money. Trying investing might also show you areas you'd like to learn more about. If you're getting more advanced, and would like to learn about options, for instance, brokerage TradeKing provides an Options Playbook that's very instructional.
Matt Krantz is a financial markets reporter at USA TODAY and author of Investing Online for Dummies and Fundamental Analysis for Dummies. He answers a different reader question every weekday in his Ask Matt column at money.usatoday.com. To submit a question, e-mail Matt at mkrantz@usatoday.com. Follow Matt on Twitter at: twitter.com/mattkrantz
Popular Reads
ABC News Live