Getting started with investing: A Goodments case study
It can be hard to know how to get started with investing, we hear you!
To help, we want to share how a Goodments customer got started. Matt, 31, works in product design, cares about his two dogs, video games, having unproductive arguments with strangers on the internet, and ethical treatment of workers. Here’s his story.
“I was a complete newbie to investing until early last year. I recently signed up to Goodments as I wanted my investments to make money, but be ethical as well. I also wanted to be able to invest small amounts frequently, and Goodments is perfect for this.
There’s a bit to learn with investing, and I’ve enjoyed having something new to ‘nerd-out’ over. I feel like I still have a LOT to learn, but am gaining more confidence all the time.
Here are my best tips for how to get started”.
1. Ask yourself some questions
Just like a dating app profile, you probably need to think about your own hopes and expectations before you start shopping around. Here are some things to ask yourself:
What are my goals?
Have a think about your investment goals. What am I looking for here — is it just money? Do I want to support a great company or industry? Do I want my investments to have some kind of social impact? Once you know what your goals are, it can help you to figure out what to invest in.
What type of investor do I want to be?
The dating metaphor really works here too. Am I in it for a quick buck? Or do I want to find somewhere to settle down? Generally speaking, a higher risk/fast growth investment could get you some quick cash in the short term, where a lower risk/slower growth investment might suit better if you’re looking for a longer term relationship.
What’s my budget?
How much money do I have to spend? Could I make this part of a regular savings plan or is it more a one-off?
2. Get a feel for what to invest in
So you’ve figured out what you want out of your investments. Now it’s time to start getting a feel for what you might invest in. Browse a few profiles, check out a few headshots. Swipe right a few times. (Just kidding. You don’t actually swipe when you use Goodments).
I thought back to my goals and figured out what types of investments would line up with them. I personally wanted tech companies with decent growth and that value renewable energy. I found a few companies that matched, and started by comparing them.
For me, it was really important that Goodments gives you both financial and sustainability metrics, which can help you make investment decisions that line up with your specific goals. If you’re looking to understand more about trading, Goodments also has a great app called Goodments Academy, which can take you through the basic terms and concepts used.
I was pretty nervous about investing at first. I found that a great way to dip my toe in was to make a few practice trades and watch how they performed over time. Once I started trading for real, I felt much more comfortable as the process was familiar to me.
3. Crack on!
Once I was feeling good about my choices, I took a deep breath and got started. Turns out, it was much easier than dating.
Here are some other tips I’ve picked up along the way for once you’ve pulled the trigger.
You don’t need to save thousands of dollars to start investing. I love that Goodments offers fractional trading, which means you don’t have to buy whole shares, so you can start with small amounts. This can feel a lot less risky to newbs like me. It’s easy to increase your investments over time once you’ve nailed it.
Timing the market
Timing the market is tough – even experts find it hard to predict what’s going to happen. There is a basic principle you could observe – buy when the price is low and sell when the price is high!
If you aren’t sure when the best time to invest is, invest small amounts regularly. I set aside a certain amount of money each month, and invest it regularly. Simples.
Over time, it’s worth spreading your risk and making sure your investments are diversified. That way, if a company you’ve invested in goes belly-up, you haven’t lost all your money. Try investing in a few different companies, or different industries. You could also consider investing in funds (ETFs) which automatically diversify for you.