For new investors with $1,000 to invest this year, it may seem tempting to wait until one has a larger sum, especially if one’s brokerage requires a minimum deposit (usually a few thousand) to waive the maintenance fees. Either way, if you’re planning to invest just a bit of every paycheque and are eager to start as the AI revolution continues paying dividends, I think there’s really no sense in waiting, especially if you’re at a low-to-no-commission broker and you won’t be on the hook for any so-called maintenance fees with a $1,000 sum invested.
Though I’m a huge fan of simple ETFs that tend to follow the S&P 500, those who wish to kick off their stock-picking journey may wish to get started with their first few stocks.
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What’s a great way to get started investing?
Though index funds and ETFs are a common, straightforward way for most to get started, I think that doing one’s own research and picking one’s own stocks will give one more conviction in what they’ve decided to own shares in. At the end of the day, Warren Buffett likes to view investing as owning little pieces of businesses, not just symbolic pieces of paper or digital symbols on a screen to be traded in and out of on a daily basis.
Remember, just because you can trade frequently does not mean you should. That’s why Buffett has said that it’s better to invest as though you’d be fine if markets were to stay closed for some period of time. Indeed, markets don’t always have to be active, especially in the face of extraordinary events. He’s absolutely right to encourage such thinking.
Either way, for new investors, I think the best time to get started is right now, even if there are concerning headlines surrounding a market correction or anything else that drives an investor to hit that sell button.
Great-West Lifeco stock looks like a dividend bargain
Now, profit-taking is never a bad idea, but I think the biggest mistake for new investors is to wait around, trying to time their entry into the broad market. Even if a plunge hits, it’s hard to get in at the bottom, even if you’re an experienced trader. So, leave the trading to the traders, and stick with wonderful firms like Great-West Lifeco (TSX: GWO), whose shares currently yield around 4.2% to go with a modest 14.6 times trailing price-to-earnings (P/E) price of admission.
Indeed, the insurer’s latest round of quarterly earnings was pretty solid, with wealth management faring well and visible operating efficiencies unlocked. Combined with a decent underwriting track record on the insurance side and recent technical strength (shares of GWO appear to be breaking out to 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 shares of GWO to continue faring well. And while a correction could always hit after the latest melt-up in shares, 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!
