First-time investing in 3 easy steps - Medill Money Mavens

Here is the video?transcript:

Interpreting the market can be a headache -- but investing for the first time doesn't have to be. (Source: Yahoo Finance)

Investing for the first time can be an intimidating process. It?s hard to know when to begin, and even more importantly, where to invest your money. I spoke with Brennan Miller, a financial consultant at Charles Schwab, about tips for first-time investors.

Brennan Miller: First of all you want to make sure you have your cash reserve covered before you begin investing. You want to make sure you?re putting money in your employer plan to get the match, and that you pay down any high interest debt. Once you?ve covered all that, you figure out if the goal you are saving for is short, medium, or longer term in nature, and then based on that time horizon and your willingness to take the risk, then you?ll build a portfolio to address that need.

Miller says your portfolio should be a combination of cash, bonds and stocks. The sooner you?ll need the money ? to buy a car or a home ? the more you should put in cash or short-term bonds. But if your goal is longer-term, like retirement, putting 60 to 70 percent of your savings in stocks allows for greater returns down the road.

Brennan Miller: The final step, which is just as important as all the others, is you need to monitor the plan. Because if you do all this planning on the front end and then you?re not monitoring things to make sure its still appropriate or your investments are working for you, then you could be surprised 3 or 5 years later when you see you haven?t really made that progress. So create a plan, create a portfolio that meets the needs of the plan and keep monitoring if you really want to put it into 3 key steps.?

Miller also says it?s good to get a second opinion when you?re investing, whether it be from a financial consultant or a friend who is familiar with the market. This is Simone Del Rosario for Money Talks.

Tags: bonds, Investing, retirement, retirement savings, savings, stock market, stocks

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