Strategy

How to invest your money: 5 easy tips and apps to get you started

“It’s not what you invest in that matters, but how much can you invest.”

Only about 55 percent of Americans are invested in the stock market through owning individual stocks, a stock mutual fund, or in a self-directed 401(k) or IRA, according to a Gallup poll. This means that many people missed out when the market hit a record high several times this year.

Fortunately, many startups have created relatively easy-to-use apps to get started with investing. Of course, easy doesn’t mean risk-free, so caution is warranted when placing your hard-earned money into any type of investment. It should also be noted that if your employer offers a retirement account benefit such as 401(k), you should sign up for it.

Here are some basic tips to get started with investing:

Start right away. “Don’t wait for the ‘perfect time’ to get in,” Nicholas J. Scheibner, a wealth management advisor at Baron Financial Group, told U.S. News & World Report. “Start now and keep adding to it.”

Be patient. “The biggest mistake beginners make is forgetting that it is a long-term investment,” Dominique Broadway, founder of Finances De-mys-ti-fied, told USA Today. “New investors may immediately see their account values fall, get nervous, and sell their investments. Patience is key.”

Understand your investments. “Always invest in the things you understand first,” writes Todd Kunsman on Invested Wallet. “Read about it, know the history of your investment, research, etc. Blindly following the herd may strike you gold, but odds are you’ll lose money before winning.”

Diversify. “The market fluctuates constantly, and things always go up and down,” writes Jane Hurst on Lifehack. “To avoid losing too much money when stocks go down, make sure you have a diversified portfolio. That way, you will have some stocks that are rising, even when others are falling.”

Commit to it. “It’s not what you invest in that matters, but how much can you invest,” Robert Farrington of The College Investor told Inverse. “For example, if you invested in Netflix 10 years ago, you’d have a total return of 3,000 percent. That’s amazing. But if you only invested $100, that would have grown to $3,000. That won’t change your life. Focus on how you can get more money into your investment accounts. Can you invest $100 or $1,000 per month? That’ll be the game changer for your wealth over time.”

And here are some investing apps to get started, recommended by finance sites:

TD Ameritrade

Recommended by: The Balance

What they say: “Its app gets our award for the best overall thanks to its range of options that work well for both beginners and experts. … With multiple platforms that give you the ability to manage many types of accounts and access the most popular investment assets and markets, TD Ameritrade stands out as a top choice.”

Fees: None for stock, ETF, and options trades; 65 cents per options contract; $25 for broker-assisted trades; $49.99 for no-load mutual funds.

Ally Invest

Recommended by: NerdWallet

What they say: “Ally doesn’t merely compete with the major online brokers on costs; it also offers bells and whistles like forex trading, an automated portfolio management option, and a suite of free tools for technical investors.”

Fees: None for stock trades; 50 cents per options contract; $20 and regular commission fee for broker-assisted trades; $9.95 for no-load mutual funds; $50 full outgoing transfer fee.

Acorns

Recommended by: Bankrate

What they say: “Acorns is one of the older of the new breed of finance apps, but it remains one of the most popular because of how easy it is to use. You really don’t have to pay much attention once you’ve set up the app. Link a debit or credit card to your account, and Acorns will round up the total on purchases to the next dollar and invest that difference into one of a few ETF portfolios.”

Fees: $5 to open account; at least $1 monthly subscription; $50 to transfer ETF when closing taxable Acorns account.

Fidelity Investments

Recommended by: The Balance

What they say: “With a Fidelity account, you can access some of the best education and research resources available among brokerages. … The brokerage offers a few of its own mutual funds with no transaction fees or recurring fees. It’s also one of the only major brokerage firms to offer fractional share investments.”

Fees: None for stock, ETF, and options trades; 65 cents per options contract; $32.95 for broker-assisted trades; $49.95 for transaction-fee bearing mutual funds.

Charles Schwab

Recommended by: NerdWallet

What they say: “Beginner investors will appreciate the company's $0 account minimum, while the $0 commission for stock, options, and exchange-traded funds will appeal to active traders. Schwab also receives high marks for its research offerings, low fees, selection of transaction fee-free mutual funds, and sophisticated tools and trading platforms.”

Fees: None for stock, ETF, and options trades; 65 cents per options contract; $50 for full transfer out of assets; $25 for partial transfer of assets.

Betterment

Recommended by: Bankrate

What they say: “Betterment is one of the (relatively) new wave of robo-advisors, and it’s one of the largest and most popular. The app provides professionally managed portfolios using a selection of ETFs and is calibrated against your own risk tolerance. … Betterment also charges a much smaller price than you’d pay for a traditional financial adviser.”

Fees: 0.25% per year on invested balance, which covers trading costs. Every fund portfolio invests in charges fund fees ranging from 0.03% to 0.50%.

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