DIY investing 101: How to get started

by | Jun 3, 2024 | Feature, Finance and Business

Self-directed or do-it-yourself (DIY) investing is an approach where you manage your investments yourself, giving you autonomy and control over what you buy and sell, and when.

There are plenty of DIY or self-directed investing platforms on the market, but Canadians may lack the necessary knowledge and support to set, track and achieve their financial goals.

However, DIY investing apps, such as TD Easy Trade, are designed to help investors set financial goals and then build the confidence to achieve them.

Here are some tips to help you get started.

Start investing as soon as you’re ready

Smaller investments (less than $100 per month) are a great way to start. Many types of low-cost investments allow you to invest your money slowly over time, which works especially well if you’re working toward long-term goals.

Set investment goals and stick to your plan

Investment goals are unique and specific to you, so they vary from one investor to the next. But every investor should be thinking about the end at the beginning.

A common misconception is that an investment goal needs to be a purchase, like a car or a house. But investing goals can also be monetary goals, such as having a regular stream of money coming in.

There are a few common questions you’ll want to ask yourself when goal setting: What is your time horizon? Are your goals short (1-2 years), medium (2-5 years) or long-term (5+ years)? Are your goals fixed or flexible?

How you answer these questions will impact how you invest.

Know what kind of investor you are before you start

Before you start investing, you’ll want to determine your risk tolerance, which is how much you can afford to lose without impacting your financial well-being, combined with how comfortable you are with taking risks in general.

Additionally, consider diversifying your investments across different asset classes to help mitigate risk. Diversification is an investment strategy where the investor’s portfolio contains various assets that aligns to their risk profile. A diversified portfolio contains a mix of investments (i.e., stocks, commodities, bonds, etc.) that may react differently to the same economic event.

Do your homework

There’s a lot of information – and misinformation – out there when it comes to investing. It can be overwhelming for new investors to sift through the noise, so it’s important to do your homework first.

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