When you start investing, you’re bound to get a lot of advice. It can be hard to parse through it all, and figure out what information works for you and your situation.

The stock market is volatile, but certain tried-and-true investment principles can help you boost your chance for long-term success. In this article, we’ll discuss good pieces of investment advice, along with how to find help if you need it.

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What is investment advice?

Investment advice is practical guidance provided by financial professionals. It typically involves offering recommendations on investment products as well as advice on how to allocate funds within your portfolio. The aim is to optimize returns and manage risk in alignment with your specific financial goals.

Investment advice looks different for everyone. What works for one investor may not make sense for someone else. But if you’re just getting started, it’s smart to familiarize yourself with the most common investing recommendations from experts.

1. Build your financial foundation first

Before you start investing, it’s important to sit down and get a handle on your entire financial picture.

Here are two essential steps to take before you put money in the stock market:


  1. Build an emergency fund: Most experts recommend saving at least three to six months worth of living expenses in a cash account for easy access. This money will act as a cushion if something unexpected arises, like a sudden job loss or costly car repairs. Consider stashing your emergency fund in a high-yield savings account to take advantage of high interest rates.
  2. Pay off high-interest credit card debt: Credit card interest rates are well over 20 percent, so if you’re carrying a balance on your card, you’re racking up tons of money in extra charges each month. Work to pay down your balance as quickly as possible. Otherwise, any gains in your investment portfolio will be offset by the debt you’re accumulating on your card. Set up a debt payoff plan and consider using a debt management strategy, such as the snowball method or avalanche method.

2. Invest in your company’s 401(k) — and get the match

Experts often recommend starting your investment journey with an employer-sponsored retirement account, such as a 401(k) plan. These accounts offer a tax advantage way to save for retirement. And since money is deducted from your paycheck, you eliminate the risk of “forgetting to invest.” It happens automatically.

Many employers will match a portion of your retirement contributions, usually up to a certain percentage. For example, an employer might match 100% of your contributions up to 3 percent and then match 50% for the next 2 percent of contributions. Try to contribute at least enough to your 401(k) to earn the company match. It’s essentially free money for your future.

If you’re not sure which investments to pick, target-date funds are a popular option. With a target-date fund, you choose a fund based on the year you plan to retire. For example, if you plan to retire in 2060, you would pick a fund closest to that. Over time, these funds gradually rebalance as you near retirement, typically shifting your assets from stocks to bonds and cash.

Not all workplaces offer a 401(k) plan to employees. If you’re in that boat, consider opening either a traditional or Roth IRA at an online broker so you don’t fall behind in saving for retirement.

3. Create a financial plan

Before you start investing, figure out your goals, time frame and risk tolerance — either on your own or with the help of a financial advisor.

You can set yourself up for success by making your goals specific, measurable and achievable. For example “I want to retire rich” isn’t a specific goal, but “I want to retire with $800,000 by the time I’m 67” is.

Once you’ve defined your goal and time horizon, you can determine how much you need to save and invest each month to achieve your goal.

Your financial plan should also include whether you want to manage your investments yourself or if you want help from a professional.

Financial advising can be expensive — especially when you’re first starting out — but options like robo-advisors have driven costs down considerably. Some robo-advisors, like Wealthfront, offer portfolio management for as low as 0.25 percent of your account balance.

4. Start investing as soon as possible

Time is like an airplane runway for your investments. The longer the runway, the more time your investments have to pick up momentum and grow. That’s why “start investing as soon as you can” is such a popular piece of investment advice.

Consider this example: Sarah starts investing at age 25. She invests $250 a month and nets 8 percent annual returns. Meanwhile, John starts investing at age 35. He invests the same amount and enjoys the same annual returns as Sarah.

But when they both retire at age 65, Sarah’s investments will have amassed $777,169, assuming no taxes or inflation, while John would retire with $339,849, assuming no taxes or inflation.

Sarah was able to accumulate more than twice as much as John, simply by starting her investment journey a decade earlier. When it comes to investing, playing the long game can really pay off.

5. Consider broadly diversified index funds and ETFs

Picking the right investments is important, but thankfully, you don’t have to be a Wall Street whiz to create a low-cost, diversified portfolio.

Index funds essentially bundle dozens, sometimes hundreds, of individual stocks into a single fund that tracks a broader index, such as the S&P 500. Over time, the S&P 500 index has returned an average of about 10 percent annually.

When you buy an S&P 500 index fund, you can gain exposure to the biggest companies in America without researching and picking each individual stock. The diversified nature of index funds also helps mitigate the impact of poor performance from any single company, lowering the overall risk of significant losses.

If building your portfolio with a few cheap funds sounds too easy, or even boring, consider this: Some of the wealthiest Americans use index funds to build their fortunes, including legendary investor Warren Buffet.

Exchange traded funds (ETFs) work very similar to index funds. Some ETFs also track a broader stock market index, while others passively track a specific sector or industry, such as large cap companies or international stocks. However, many of these ETFs charge more than the low-cost funds mentioned earlier and may not deliver the same high performance.

When you invest in an index fund or ETF, make sure to check its expense ratio, or the percent of your investment you’ll pay as a fee to the fund company each year. You can find many index funds with an expense ratio under 0.20 percent, which would cost you $20 for every $10,000 invested.

But some of the most popular broadly-diversified funds are even cheaper than that. Vanguard’s S&P 500 ETF (VOO), for example, charges an expense ratio of just 0.03 percent, or $3 for every $10,000 invested annually.

6. Time in the market beats timing the market

This sage piece of investment advice emphasizes the importance of investing long-term instead of trying to predict short-term market movements.

Predicting the stock market is notoriously difficult, even for experts.The volatility and transaction costs associated with frequent trading can also eat into your returns.

A smarter investment strategy is dollar-cost averaging, or the practice of consistently investing a fixed amount of money over time.

Regularly injecting money into your investments helps you capitalize on market downturns, optimizing your average purchase price and boosting your overall share count. During market upswings, your regular contributions may secure fewer shares, but you’ll already have shares from prior purchases, so you’ll still gain and won’t completely miss out.This helps smooth out market fluctuations over time.

7. Automate as much as possible

It’s easy to get sidetracked by life. Sometimes you invest — but sometimes you forget. Automating your investments ensures you’re consistently working toward your financial goals, without even thinking about it.

One of the easiest automatic investment options is a workplace retirement plan, such as a 401(k). With a 401(k), you can contribute a portion of your salary directly to your retirement plan before your paycheck ever hits your bank account. Contributions reduce your taxable income, which can help you out at tax time, too.

Setting up automatic contributions to your IRA or taxable brokerage account is also fast and simple. Just link your bank account, choose how often you want to contribute money and select your investments.

So, set it, forget it, and let your money do the heavy lifting. Your future self will thank you.

Where to get investment advice

When it comes to investing, you don’t have to go it alone. If you still need help managing your investments, there are several options available.

Online brokers

Many online brokers, such as Charles Schwab, and Fidelity, offer extensive educational resources, which can be especially helpful for new investors. They also provide robust research and screener tools if you decide to take a more hands-on approach to your portfolio. The best part: You can mostly access these articles, videos, tools and webinars for free through your existing brokerage account.


Automated platforms such as Betterment or Wealthfront use algorithms to manage investment portfolios based on your preferences and risk tolerance. This option helps make investment decisions more accessible for those who prefer a hands-off approach.

Financial advisors

Financial advisors can help manage your investments but their real value lies in the other services they offer, such as holistic financial planning and estate planning. If you want professional guidance on your entire financial picture, working with an advisor can be a good option.

Bottom line

Investing can feel daunting, but following certain principals can help simplify the process. If you feel stuck or need more personalized guidance, consider working with a financial advisor. For simple portfolio management, using a robo-advisor presents a more affordable alternative. Taking time to research and learn as much as you can about investing will also boost your odds of long-term success.