The Motley Fool

How to Get Back Into Investing

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It appears to be simple at first. You make the decision to open up a Tax-Free Savings Account (TFSA), for example, and with the help of a financial advisor and your own research, make some great investments. You have a chunk of money to put toward those investments, and a goal in mind to work toward.

But then, time goes by and you just aren’t paying attention to those savings any more. In fact, it might even seem like you’ve just put some cash aside and it might as well be sitting in a savings account rather than making you some actual long-term dough.

And that goal you had in mind? That’s changed. You’re no longer trying to pay off student loans — you’re aiming to save up for kids, even retirement. Life changes, and so should your finances.

So, after years of sitting on the sidelines, it’s time to get back into the investment game. But where to even start?

Goal achieved

Did you reach that goal you had in mind way back when? Even if you haven’t, it’s not as if you only need one. The first step to getting back into investing should be to decide what you want to start saving for again.

In fact, you could even open up multiple accounts with a goal in mind for each account — one for student debt, another for retirement, and the list goes on.

Then, talk to your financial advisor and come up with some numbers for those goals. What do you want to be bringing in each year once you retire? And what will you need to do in order to reach that number?

Read up

Now comes the research. It can seem daunting if you’ve been out of the investment game for a while. Trust me, as a mom with a toddler and a new baby, I get it. But the first step is the easiest: read. Just start dipping your toe in and see what peaks your interest.

You’ll soon discover that you probably will lean more toward a certain type of investment strategy. If you’ve got cash and time to spare, maybe you’re interested in some riskier options. If you’re hoping for a slow and steady growth portfolio, that research will probably jump out at you more often.

Choose wisely

If it were me, I’d look at creating a diverse portfolio from a number of areas. That doesn’t just mean choosing an oil and gas stock and a bank stock, but also growth stocks, value stocks, and of course dividend stocks. That way if one area goes down, there will likely be others to pick up the slack.

Bring those options back to your financial advisor and the pair of you can discuss a plan to move forward. Some great options to consider right now are Enbridge Inc. (TSX:ENB)(NYSE:ENB) and Royal Bank of Canada (TSX:RY)(NYSE:RY), both trading below value with high dividends, a stable history, and a strong future.

Create an action plan

The first time around, you might have had a big chunk of change to put towards these investments. Now, things could be different. So instead of deciding to put thousands away, why not start with something like $100 once a month?

A great option is to take 5% to 10% of your paycheque and invest that automatically every month. Then, once a quarter, for example, take a look again at your investments and decide what (if anything) needs to change.

To ensure you don’t have to start the process all over again, consider putting reminders in your calendar to take a look at your portfolio. The only thing you’ll then need to worry about is how to spend all that cash make.

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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe owns shares of ENBRIDGE INC and ROYAL BANK OF CANADA. The Motley Fool owns shares of and recommends Enbridge.

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