How To Start Investing In Today's Market

Jul 21 2026

Written by Sandy Yong is a licensed CFEI® & award-winning author with a proven track record of success

How To Start Investing In Today's Market

You know that one of the best ways to grow your wealth is by investing your money. The barrier for most of us, is how, where and when to get started. The focus of this article is how and where to invest in the stock market, as this is one of the the most common and available investment options.

You might be wondering, “When is a good time to invest in the stock market?” It’s a valid question given today's challenges with inflation, tariffs, and trade wars. Each of these is a reason to be nervous and anxious about the stock market's volatility, let alone all of them at once.

If you’re curious about investing in the stock market, this article will give you a crash course on how to get started and stay the course. I’ll cover the preparation involved, how to build your portfolio, and how to manage it once it’s set up.

Start With Defining Your Investment Goals

A lot of people ask me where to invest or which stocks to buy. Before I even think of answering, I have to ask why each person wants to invest. "What's your goal?"

The most common answers include saving for a car, a home, a family vacation, a kid’s education, or retirement. Regardless of the reason, by knowing your investment goal(s), you can then define an investment plan and portfolio that puts you on the path to hit the goal. Each plan has to account for factors like timeframe, risk tolerance, and access to cash over time. So, once you have your goals and plan in place, the more likely you'll be invested in your own investment success.

One other key factor to consider is the opportunity to leverage compound interest to build wealth. The more time you have to invest your money, the more you’ll be able to leverage the power of compound interest to help build your wealth. You can use a compound interest calculator to see how much an investment could possibly grow.

Define Your Risk Tolerance Level

On average, stocks generate 6% to 8% returns annually, whereas bonds generate 2% to 3%. That means stocks come with higher risk, but with higher rewards. Bonds have lower risk and, thus, small returns over time. Knowing where you lie in the tolerance for risk will help to define how you mix stocks and bonds in your personal portfolio.

If you can’t stomach double-digit market dips or drops, you may want to assemble a portfolio that’s lower risk. For example, those nearing retirement may opt for a conservative portfolio with a higher bond allocation because they’ll need to start withdrawing money from their accounts in the near future. In contrast, a young adult with decades to invest in the stock market may be able to take on more risk because they have time to ride the market's waves. So, their portfolio may have a higher proportion of stocks to bonds.

Risk evaluation should also consider if and when you'll need to tap your investments to support life needs. Are you planning to buy a home, start a family, perhaps start a business? If so, you'll need to incorporate the need for access to personal capital as you build your investment portfolio. Perhaps you want to setup plans for your children and start their path to financial independence. Putting this into your plan can also impact where and how your place your investments.

Every individual is different and faces unique circumstances. Be sure to have the right asset allocation (mix of stocks and bonds) that aligns with both your financial goals and personal risk tolerance.

How And Where to Invest

There are several ways and factors to consider when you're ready to open an account and begin investing.

Here are the primary options for new investors:

Online Brokerage Account

If you like to be in the driver’s seat and control your investments, then online brokerages are a great way to become a self-directed investor. You will need to choose from a variety of options, including major banks, independent major online brokerages (such as eTrade) and even newer and niche sites like Robinhood. Keep in mind that if you take this path, you will need to make your own decisions and trust your own judgment.

Robo-Investment Platforms

Robo-advisors rely on computer automated alghorithms to build, manage and balance your portfolio based on the goals and the level of risk tolerance you define in the platform. These platforms can be highly customized. They also charge fees that are a defined percentage of your assets and expense ratios, so make sure you check the fees before deciding which one is right for you.

Company / Employer Sponsored Plans

Check whether your company offers employer-sponsored plans. These plans offer key strategic advantages, including tax savings and matching funds. They can also carry risks, like job dependence and limited options. Either way, these accounts can be great ways to invest in 401(k) and 403(b) retirement accounts. They can also be good options to invest your money.

Financial Advisors

If you believe that you need professional guidance or have a complex financial situation, you may consider working with a licensed Financial Advisor. If you are inclined to take this route, make sure you evaluate the Advisors' fee structure, expertise and see if you can find a reference or referral from someone you know and trust. And make sure the person you choose is someone you trust to make decisions that align to your goals and is someone with whom you are and will be comfortable having personal financial conversations.

What Are You Investing In?

Once you have an account open, you can pick the type of financial products that match your goals. Before you start assembling your portfolio, think about diversifying your investments. One way to diversify and benefit is by investing in Index Funds. These funds provide turnkey diversification, low costs and they historically have strong performance. This also spreads your risk ask the fund is buying shares in hundreds or even thousands of different companies.

The best part is that index funds and exchange-traded funds (ETFs) are readily available. So, you can buy a fund that holds a bunch of companies for you. The S&P 500 is a classic example. Another popular option is an all-in-one ETF, which holds a specific ratio of stocks and bonds based on your risk tolerance.

Watch Out For Fees

Every stock or fund purchase comes with a cost. There are fees associated with investing, such as trading fees, management expense ratios (MERs), and currency exchange fees. Not all providers and financial products charge the same fees. Some charge significantly higher fees than others. And 1% to 2% in fees may not sound like a lot. However, over time, it can make a big impact on your overall portfolio.

For example, mutual funds tend to charge 2% to 3% in fees, whereas you can typically find a similar product through index funds or ETFs for a fraction of the cost. Do your research and compare fees to understand how much you’re paying in fees each year.

Avoid Panic Selling

You might see in the news with scary headlines about the stock market nose-diving. Remember, corrections and crashes are a normal part of the stock market cycle. It’s inevitable that the market goes up and down. No one can predict where the stock market is headed.

However, if you look at data from the past several decades, you can see that the stock market has trended upward. Even in times of crisis, the stock market has recovered and reached new heights. Again, past performance does not guarantee future returns. Always understand the risks you're taking before you invest your money in the stock market.

Stay On Track

It’s a huge milestone when you’ve started your investing journey! It takes a lot of courage, but you’re taking the right steps to set yourself up for financial success. The next challenge is to stay the course and not tinker with your portfolio. If you start making trades, the fees can add up quickly. And fees matter even more if you’re starting with a small amount.

A simple and effective tip is to automate your savings and regularly contribute to your investment accounts. That way, you can leverage dollar cost averaging (DCA) where you buy stocks or bonds at regular intervals, no matter what the stock price is. You’ll also want to rebalance your portfolio semi-annually or annually to maintain your original asset allocation.

FAQ

What’s the difference between trading and investing in the stock market?

Investing is when you buy assets (like stocks and bonds) for the long run, often over decades, so compound interest can help you grow your net worth gradually. Trading is when you buy and sell assets frequently (like day trading) to make a quick, short-term profit. Trading usually requires extensive time and expertise and can be very risky.

Can I still invest if I have little money?

Of course! With fractional shares and round-up apps, it’s never been easier to invest with pocket change. Even with a small amount of money, if you regularly invest, your contributions could add up over time. If you receive a bonus, raise, tax refund, or birthday money, it’s a good idea to put a portion of that towards your investments.

What if the stock market goes down after I start investing?

That’s part of the risk you take when you invest in the stock market. It’s natural for the stock market to go up and down. As long as you have a long-term mindset, there’s no need to pay attention to the daily fluctuations. Otherwise, you can easily get caught up in the fear and sell at a loss.