Investing for Beginners

Naiveté is a wonderful thing when it comes to investing for beginners – as long as the beginner knows what he doesn’t know. In fact, if lack of understanding breeds humility, then naiveté is a truly indispensable asset.

Investing for beginners in today’s world is without question an intimidating undertaking. There are multiple television networks, countless internet services and of course books galore aimed directly at the individual investor. The topic of investing for beginners is addressed virtually every day on the networks. The problem is, in teaching what the programmers deem investing for beginners, the “expert” often takes the unsuspecting neophyte way beyond the fundamentals of asset allocation and into the realm of option strategies, leveraged ETFs and hedge funds – places previously reserved for only the most sophisticated investor.

Unfortunately, all this sizzle, while it surely attracts attention, has virtually no practical value with regard to investing for beginners. The supposed can’t-lose strategies, devised by individuals no less credentialed than Nobel laureates, have time and again met utter annihilation when faced with the inevitable bear market. Yet the latest get-rich program proffered under the heading “investing for beginners” will surely involve a resurrection of one of these old too-hard-to-resist strategies.

The investing for beginners mantra ought to be – if it sounds too good to be true, run!

Having counseled individuals for over a quarter-century, I have a clear perspective on investing shoulds and should nots – and whether it’s investing for beginners or for the would-be expert, there’s very little distinction among the appropriate strategies (operative word being “appropriate”). Therefore, while it’s important to understand how markets operate, how to diversify, etc., when it comes to investing for beginners, knowing what not to do is critical…

My advice for now is to take your investment education one-day-at-a-time, perhaps hire a professional (read The Independent Financial Advisor), and above all steer clear of the “investing for beginners” course promising great wealth with little or no risk…


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