For new investors with $1,000 to invest this year, it may seem tempting to wait until one has a larger amount, especially if the brokerage requires a minimum deposit (usually a few thousand) to waive maintenance fees. Either way, if you’re only planning to invest a small portion of each paycheck and are eager to get started as the AI revolution continues to bear fruit, I don’t think there’s any point in waiting, especially if you’re with a low-to-no commission broker and with $1,000 invested you won’t have to pay any so-called maintenance fees.
While I’m a big fan of simple ETFs that tend to track the S&P 500, those looking to start their stock picking may want to get started with their first few stocks.
What’s a good way to start investing?
While index funds and ETFs are a common, simple way for most to get started, I think doing your own research and choosing your own stocks will give you more convincing about what to own shares in. Ultimately, Warren Buffett likes to think of investing as owning small pieces of a business, not just token pieces of paper or digital symbols on a screen that can be traded in and out on a daily basis.
Keep in mind that just because you can trade often doesn’t mean you should. That’s why Buffett has said it’s better to invest as if you would be fine if the markets were closed for a while. Markets do not have to be active all the time, especially when there are extraordinary events. He is absolutely right to encourage this thinking.
Either way, for new investors, I think now is the best time to get started, even if there are worrying headlines about a market correction or anything else that prompts an investor to hit the sell button.
Great-West Lifeco shares look like a dividend bargain
Now, taking profits is never a bad idea, but I think the biggest mistake for new investors is to wait and try to time their entry into the broad market. Even if there is a dip, it is difficult to get to the bottom even if you are an experienced trader. So leave the trading to the traders and stick with great companies like Great West Lifeco (TSX:GWO), whose shares currently yield about 4.2%, with a modest entry price of 14.6 times its price-to-earnings (P/E) ratio.
The insurer’s latest quarterly results were quite solid, with asset management performing well and visible operational efficiencies achieved. Combined with a decent insurance track record and recent technical strength (GWO stock appears to be hitting new highs), I view the name as a perfect first stock for new investors looking to stay invested for decades to come.
Looking ahead, I expect GWO shares to continue to do well. And while there could always be a correction after the stock’s latest rise, I wouldn’t hesitate to be a buyer. So if you’re a new investor looking to invest every payday, start with proven dividend payers like Great-West and let compounding handle the rest!
#smartest #dividend #stocks #buy