Stephanie Faris of GO Banking Rates shares Ryder's advice:
“You cannot invest without getting your finances in order,” said Ryder Taff, a chartered financial analyst and portfolio manager at New Perspectives, a fee-only investment advisory firm in Ridgeland, Miss. “Make sure that you have money to invest, and part of your budget can go to saving and investing each month. While retirement savings through an employer account is a high priority, and investing for other goals is very important, you must have your other finances in order before investing.”
“Diversification is important in two ways — between and within asset classes,” said Taff. Asset classes are defined groups of securities and investments that are expected to behave similarly, according to Taff. Examples of asset classes include large U.S. stocks, small U.S. stocks, foreign stocks, corporate bonds and cash.
Taff recommended having different asset classes in your portfolio, adding that your precise mix will depend on your unique situation and goals. “It is the role of an advisor to help optimize that mix for you,” he said.
“Within asset classes, you can diversify by investing through funds,” said Taff. “Funds hold a lot of different securities or investments in them so that you don’t have to pick out individual ones. Index funds are everywhere and are cheap to buy and hold.”