Starting with Investment? Here’s a simple guide for beginners

It may initially appear intimidating to explore investing. However, you don't have to jump right in. This is the best manual for learning how to invest wisely!

With Smart Invest, investment is straightforward and you can get started right away online or on your phone. Consequently, investing with Smart Invest could help you achieve those significant life goals, whether it's a college fund or a nest egg.

What is an Investment?

Prior to beginning, it is important to comprehend the fundamentals: What then is investing? Purchasing an asset (anything of worth) with the intention of seeing its value rise over time so you can sell it and profit is what is meant by investing.

Investors naturally choose assets they believe will increase in value over time and/or generate income.

Should I save more money or invest?

A negative possibility is that an asset's worth will diminish over time. You might be thinking, "Why not just keep my money safe in the bank then?" In conclusion, if you're prepared to invest, the possible rewards may outweigh the risks.

Your money is either generating nothing, very little interest, or even costing you money in the bank. In reality, even if your money is earning interest, it almost never outpaces inflation, which means that interest doesn't ultimately give you additional purchasing power. On the other hand, investing offers a chance for passive income. To put it another way, making little to no effort at all in order to get money.

Am I ready to make an investment?

To be sure you're prepared to begin investing, first take a look at your present financial condition.

Do you owe any money that needs to be repaid right away?

Is there a particular date by which you anticipate needing the money back?

Do you have enough money saved to support your typical living expenses for three to six months?

Your go-to investment glossary: Jargon-Busting

It cannot be denied. It takes some practice to understand the technical jargon used in investing. So let's start by going through the fundamentals.

1. Asset

You make an investment in an asset. Assets can range from works of art or antiquities to more conventional assets like stocks, real estate, and bonds. They may be physical objects or immaterial objects with monetary value but no physical counterpart.

2. Share/Stock/Equity

Shares are used to represent ownership in a corporation; think of a share as one pie slice. Share prices might change in accordance with the company's performance. Share, stock, and equity are phrases that are frequently used interchangeably.

3. Bond

A bond is a financial loan made to a business or government by an investor.

4. Funds for investments

A fund is often a collection of money from several investors that is intended for a particular use.

5. Managing a fund

An investment professional is in charge of a managed fund. They can assist minimize risk and lower expenses because they are educated about the assets and the market.

6. MAPs (Multi-Asset Portfolios)

MAPs are a variety of unit-linked funds offered by Irish Life Assurance investment plans that are invested in various asset classes. The risk level of the funds varies based on the mix of assets and their volatility.

7. Volatility

Volatility is a shift in an asset's price or worth, particularly over a short period of time. This is entirely typical. Changes in the market or in the asset itself may be to blame.

Less chance of significant value changes when volatility is low. High volatility increases the likelihood of abrupt ups and downs.

8. Diversification

One risk management method is diversification. It is an investment strategy that involves spreading your money out. A decrease in one asset's value may be accompanied by an increase in another, reducing the likelihood of a loss altogether. An investor purchases a variety of assets in the hopes that they would ease the trip of investing and provide peace of mind in the long run.