BEGINNER'S GUIDE TO INVESTING: START YOUR JOURNEY NOW

Investing involves buying assets that you believe will become more valuable in the future. But it’s not without risk- there’s always the chance you could lose some or all the money you started with.

No matter where you are in your financial journey or what your goals may be, one timeless principle tends to hold true: The sooner you start investing and the longer you stay invested, the more chance you have of meeting your investing goals.

Here’s a primer on how you can start thinking about your investing journey:

• Define your financial goals
• Define your risk tolerance
• Evaluate what types of investments could help you meet investment goals
• Set up your investment portfolio
• Investment considerations: start early, automate, diversify, and adjust with time

Identifying clear financial goals is crucial when embarking on your investment journey. Are you investing for retirement, buying a new home, funding your children’s education, or aiming to grow your wealth? Even when pursuing multiple goals at once, focusing on specific, individual goals may help you determine how to invest.

Your ability to tolerate risk can help be determined by two key factors:

• Willingness to take risk: This refers to how well you can stomach market volatility. Do market gyrations cause you emotional angst?
• Ability to take risk: This refers to your financial capacity to take risk, and is based on time horizon and liquidity needs.

Shorter-term goals (e.g. vacations, emergency funds) may require a more conservative investing approach, with a focus on safety and preservation of capital. You may opt for “risk-free” assets like short-term U.S. Treasuries, which are backed by the full faith and credit of the U.S. government.  

Medium-term goals (e.g. down payment on a home, college education) typically allow for a higher tolerance for investment risk. With more time to recover from market fluctuations, allocating a portion to equities could help your investments grow more than investing in bonds alone.

Long-term goals (e.g. retirement or estate planning) can span decades, allowing you to consider investments with higher potential risk and return profiles. Examples include less liquid assets such as real estate that require longer holding periods.

Importantly, the further away you are from your financial goal, the more time you have in the market to grow your assets and recover from any near-term losses, typically allowing for a greater risk tolerance.

Consider ETFs to simplify your investment strategy. ETFs can help make your investment journey easier and more efficient — especially as your goals evolve.

According to BlackRock’s 2025 “People & Money” survey,¹ the top reasons American investors chose ETFs include:

• Diversification potential across markets and sectors (47%)
• Ease of trading (40%)
• Cost efficiency and low management fees (36%)

Certain ETFs make it fast and easy to invest across a diversified portfolio of stocks and bonds, which may make it easier to make investment decisions. These “all in one” ETFs are designed to serve as the basic building blocks of an investment portfolio and exist for investors with conservative, moderate, or aggressive risk targets. These low-cost vehicles may be easy ways for investors to maximize their “time in the market,” which plays a vital role toward long-term success.

Similarly, target date ETFs can simplify retirement planning.

In a target date ETF, a team of investment professionals guide the portfolio toward a target date in the future when you plan to retire or start withdrawing money. They do this by reducing risk over time through adjustments to the fund’s underlying mix of stock and bond ETFs.

Simply select the fund closest to your 'target date' — the year you plan to retire — and these funds automatically adjust their asset mix to be more conservative as the target date approaches.

Investing Early and Often: It's never too late to start investing but starting earlier is one of the best ways to set yourself up for success. And once you start, you should try to invest often. If an investor established an automated investing plan to put $250 to work each month in the S&P 500 over the last 40 years, she would have seen her account grow to about $1.8 million dollars, and it would have only taken $120,000 of principal to get there thanks to strong market performance and the power of compounding.

The Potential Benefits of Automated Investing: If you are looking at this chart and thinking "that's awesome — but investing each month sounds daunting and time consuming," I have good news: automated investing may make it easier to stay invested, stay disciplined, and work toward your goals.  Automated investing can help remove the guesswork and emotions that can get in the way of good decision making, and may alleviate concern that you need to constantly watch the markets.

Automation can also make investing more accessible. Many platforms have low minimums, and simple setup processes so you can establish recurring investments into various assets,  including ETFs, and you can start with as little as $1 when you buy fractional shares.

With automated investing, you can spread investments across a mix of asset classes — such as stocks, bonds, and cash — based on your risk tolerance and time horizon. Diversification may not protect your portfolio against market risk or loss of principal, but it can help investors navigate fast-changing markets and stay the course to pursue their financial goals. (Learn more about the benefits of diversification.)

Consider diversifying beyond stocks: Investing across a variety of stocks is a good start, but it may not be enough.

Over the past five years, the U.S. stock market doubled, yet 36% of individual stocks lost money.² In contrast, less-than 1% of ETFs focused on U.S. stocks posted losses during the same period^{3 —} highlighting the risks of picking individual stocks, even in a rising market. Diversifying can help capture more of the market’s return while reducing the risk of betting on the wrong stocks. ETFs offer a straightforward way to help diversify your portfolio — making it convenient to balance risk and reward.

Just like your taste in living situations changes over time — say, moving from a lively city apartment to a quieter home in the suburbs — your investment portfolio should evolve too. That downtown apartment might have been perfect in your twenties, but it’s not ideal when you’re thinking about space for a growing family or a backyard for weekend barbecues. In the same way, investors with longer time horizons, such as younger investors saving for retirement, often have the flexibility to take on more risk and may favor stocks for their growth potential. But as life progresses and retirement approaches, priorities shift. Stability, income, and preservation of wealth become more important — making safer assets like bonds and cash a more likely fit. Your portfolio, like your living situation, should match where you are in your investment journey.

With your plan in place, it’s time to put it into action — like packing for a trip. You’ve chosen your destination (investment goals) and what to pack (asset allocation). Now, it’s about picking the right bags: your investment accounts.

There are three main types:

• Tax deferred accounts (e.g. 401(k)s and traditional IRAs). Think of these like checked baggage, which meets you at your destination. You contribute pre-tax dollars, defer taxes until retirement, and potentially pay a lower rate later. Deferring taxes allows more money to stay invested and compound over time.
• Tax free accounts (e.g. Roth IRAs) are also like checked bags, but with extra perks, like spinner wheels that help you get around more easily. These are funded with after-tax dollars, but grow tax-free. You don’t get a tax benefit up front, but you potentially save more in the future.  These accounts can be especially valuable if you expect to be in a higher tax bracket in retirement.
• Taxable brokerage accounts are akin to carry-on bags, which are accessible, but involve a little extra hassle in lugging them around. But the benefit is access — or, in this case, no age restrictions on withdrawals.

Many investors may benefit from using all three to maximize flexibility. For example, IRAs have annual contribution limits of $7,000 in 2025 if you’re under 50; $8,000 if you’re over 50 in 2025. (For tax year 2026, the limits rise to $7500 and $8600, respectively⁵). If you’ve maxed out tax-advantaged accounts, taxable accounts are a great way to keep your money working.

When building an investment plan, start by defining your goals. Invest early, consistently, and stay invested for the long-term. Consider using ETFs to efficiently build your portfolio — they’re widely available commission-free through most brokerages, including Fidelity, where iShares ETFs have no investment minimum and can be purchased in fractional shares starting at just $1.⁶