Three Key Strategies for Investing Successfully in 2023

Guest blogger John from Frugal Rules shares some great insights about investing in the New Year. As we dive into a fresh year, many people start thinking about resolutions like saving money, losing weight, or getting a better job. An excellent addition to this list is starting to invest.

Having worked as a stockbroker, I’ve noticed that every January brings a wave of new investors. For beginners, the stock market might seem overwhelming. However, it doesn’t have to be that way. If investing is part of your New Year’s resolutions, here are some basic yet impactful rules for beginners to help you navigate the path.

DON’T LET A LACK OF FUNDS HOLD YOU BACK

Many people mistakenly believe you need a lot of money to start investing—thousands or even tens of thousands of dollars. That’s not true. You can begin with a small amount of money, and plenty of brokerages let you start with $500 or less.

Don’t worry if you don’t have a lot of money right now. Instead, see it as a challenge to start investing as soon as possible. Begin by saving a little each month. Even putting aside an extra $20-$50 monthly can get you started within half a year with many online brokers. Remember, every little bit adds up, and your future self will thank you for taking action, even with a small amount.

AUTOMATE YOUR INVESTMENTS

Important tasks often get delayed or forgotten because of our busy lives, and investing for your future is no exception. To avoid this, use automation. If you find it hard to consistently add money to your investment account, set it up to be automatic.

Many online brokers let you automatically deposit money at any regular interval. This way, it becomes easier to invest without actively thinking about it. If you have a 401(k), you could do the same by increasing deductions from your paycheck or setting up an annual rebalancing of your account.

KEEP IT SIMPLE

New investors often make the mistake of complicating their strategies, trying to beat the market, which can be risky. Instead, think about putting your money into low-cost index funds. These funds generally follow market trends, making it less complicated for you.

Most online brokerage accounts show lists of top-ranked funds. You can also find them through a simple online search. If you’re using a 401(k), most plans include a few low-cost funds. If yours doesn’t, ask your Group Benefits department for options, as they’re there to help.

If you’re starting your investment journey this year, well done! Follow these straightforward tips, and you’ll be on your way to building wealth that will benefit you for years to come.

John Schmoll, the founder of Frugal Rules, writes to help people achieve financial freedom. With strong budgeting skills and investment knowledge, he aims to help others avoid financial mistakes. John has extensive experience in the financial services industry, holds an MBA in Finance, and worked as a licensed stockbroker.