Looking to start investing? Read this advice from the expert first!

If you want to protect your wealth, investing is a wise idea. Unfortunately, investing can be intimidating, especially if you’re new to it. Further, even for experienced hands, some investing concepts are complex and challenging to understand. Fortunately, Darrin Eakins of Wilmington, NC, will share some must-know investing insights for those new to investing.

“The first thing to understand with investing is that knowledge really is power, or perhaps more to the point, profits,” he explains. “It’s smart to study investing and do so every day, even if you only spend 15 minutes studying; it can make a huge difference.”

Studying investing doesn’t mean having to complete a finance degree at a university or online. Although, if you want to take formal classes, consider your local community college. Many colleges offer affordable investing classes that working professionals can complete in their spare time.

You can also find plenty of great investing books on Amazon. Then you can work through the books one chapter at a time. Another option is to subscribe to a finance/business-focused newspaper, like the Wall Street Journal or Financial Times. Staying apprised of industries and government policies can go a long way too.

So what might you learn while studying investing? Some of the basics can go a long way.

“The first concept newer investors should understand is probably diversification,” Darrin Eakins argues. “If you diversify your portfolio, you can reduce risks, which is very important when safeguarding your wealth.”

Diversification can mean many things. For example, you might hold stock in Apple, Microsoft, and Amazon instead of just Apple. This way, if one company stumbles, your wealth is still protected. You can also diversify by industry, investing in, say, Apple, Toyota, and Johnson & Johnson.

“Investing in multiple industries is often wise,” Darrin Eakins explains, “however, with newer investors, I recommend sticking to industries you know. If you follow technology closely and work in retail, investments in retail and technology offer a good start. Just make sure you don’t let any allegiances say to your employer or favorite tech brand color your investment decisions.”

Investing in industries you’re familiar with may make it easier to understand trends, data, consumers/customers, and more. Macrotrends, in particular, can be very important. If you understand the general trends in an industry, you can look for winning companies that will profit from those trends.

“Definitely, keep an eye on macro trends. If a recession lands, most stocks and other assets will lose value,” he notes. “Also, pay close attention to government decisions, say raising or lowering interest rates, as they can have a big impact on society as a whole.”

Setting Up Your Investment Portfolio

Once you have some knowledge under your belt, it’s time to start building your portfolio. So how do you get started? By finding a stockbroker that offers affordable fees and value-added services.

“One thing investors sometimes fail to consider is how quickly fees add up,” Darrin Eakins says. “Some brokers charge $30 bucks or whatever a trade. Those fees can add up, so consider lower-cost brokers, especially at the start of your investing efforts.”

Mike Bjorkman is a real estate professional with many years of experience. Based in California, he’s been paying close attention to recent market activities and is fielding many questions from people as a result.

Recently, he’s had a lot of inquiries about how to tell when a particular local housing market is cooling off. Thankfully, learning how to tell isn’t necessarily difficult, though it will require you to pay attention to a few important things. 

What Your Local Housing Market is Trying to Tell You

Mike Bjorkman notes that one of the best ways to tell whether or not your local housing market is cooling off involves paying attention to the available inventory in the area.

In 2020 and 2021, in particular, as demand surged due to the pandemic and historically low-interest rates, it was rare that any particular house sat on the market for very long. Some didn’t even make it to market before getting several offers. In particularly hot areas, it was more common to see “Coming Soon” signs in front yards than “For Sale” signs.

However, as the market begins to cool down, this all starts to change. More houses will be sitting on the market, and they’ll also be available for longer periods – think days or weeks instead of hours.

Another tell-tale sign that a local real estate market is cooling off is the level of activity at the open house events that usually occur on weekends. Over the past few years, if you walked around your neighborhood and came across an open house, it would probably have a steady stream of people going in and out all afternoon. When the market begins to cool, the number of interested parties willing to stop by will likely begin to drop off – leading to less activity.

You can also tell whether a real estate market is cooling off by paying attention to the prices that the homes that are selling are going for. Keep in mind that sale prices on real estate are a matter of public record – after someone closes on a property, the price that it sold for will be listed on sites like Redfin and Zillow in just a few days.

At the height of recent buying activity, homes were going for incredible prices – including ones that they would never have been able to achieve under normal circumstances and ones that they likely won’t be able to reach again once things return to normal. If you start to see the average selling price of a home in your area creep back down, it’s an indication that things are definitely in the process of cooling off.

In the end, Mike Bjorkman wants to reiterate that we see some genuinely historical activity regarding real estate. First, there were unprecedentedly low-interest rates and record demand. Now, there are higher interest rates to combat inflation. As the old saying goes, “everything old is new again” – real estate runs in cycles, and before you know it, the pendulum will swing back in the other direction. Those who are paying attention are those who will benefit when it does.