Motley Fool Money Before You Open an Investment Account
Apr 20, 2024
Matt Frankel, a certified financial planner, joins Robert Brokamp to guide new investors on their journey to financial freedom. They discuss essential steps for opening an investment account, including defining goals and selecting the right brokerage. The conversation delves into building a diversified portfolio, mixing index funds with individual stocks, and maximizing retirement savings through IRAs and 401(k) plans. Additionally, they emphasize the importance of understanding fees and encourage starting early while balancing caution with proactive investment strategies.
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Investing Time Horizon and Risk Tolerance
- Avoid investing money needed within five years in the stock market.
- Never invest money you cannot afford to lose.
401(k) and Retirement Savings
- Maximize your workplace retirement plan by contributing enough to get the full employer match.
- Consider target-date funds if you are unsure about investment choices.
Beneficiary Designations
- Always designate primary and secondary beneficiaries for your 401(k).
- This avoids probate and ensures your assets transfer smoothly.