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How to start investing

Unsure of how to start investing? Our Investing 101 guide can equip you with the tools and education you need to begin on the right path to grow your money.


Video Transcript

Are you ready to invest, but aren't sure how? The world of investing can be an intimidating place. We put this course together to help you understand the basics and get started investing.

In Just the Facts: Investing, Tonya Rapley, State Farm® Agent Earl Gordon, and financial coach Dan Wood arm you with the no-nonsense knowledge you need to help you navigate through the investing process. Just the Facts: Investing equips you with tools, support, and education specifically designed to help set you on the path to potentially growing your money in a disciplined manner.

Watch the investing overview and you'll soon see how to explore all the various investment options.

Breaking down Just the Facts: Investing

This course is conveniently divided into shorter segments so you can enjoy each on your own schedule. Subjects covered include:

Take a realistic look at today, then prepare for tomorrow

Before you start investing, we suggest taking an inventory of your current financial situation. It'll be helpful to plan and allocate money when you know how your debt plan and emergency funds are coming along. 

Download the Just the Facts: Investing worksheet to help keep you on track for achieving your investing goals.

Chapter 1 — Are you ready?

Before you make the leap to investing, check out the guidance offered by these experts.

What to Know Before You Start Investing

The sooner, the better

Invest a small amount of money at first. Then, as you get more comfortable and experienced, you may add more funds to your investments.

Investing tip: Start early to give yourself more time to maximize returns through compounding interest.

Chapter 2 — Why start early

Give your money a chance to grow — start investing as soon as you can.

Know When to Start Investing

It takes money to make money

Riskier investments are more volatile, but that also means they could deliver you greater rewards. Figure out the level of investment risk you are comfortable with, especially when it comes to high-risk investments.

Safer investments are often more stable, and don't often offer as much reward as higher-risk investments. Keep in mind, it’s all about aligning your investments with your goals.

Chapter 3 — Risk vs. reward

Learn the difference between low- and high-risk investing, and how to choose the approach for you.

Invest Smart — Learn the Ropes Right Here

What's your time frame?

For short-term goals, think about a more conservative investment approach to help protect your money.

For long-term goals, you may invest more aggressively because you'll have more time to recoup any potential losses, and grow your money for when the time is right.

Chapter 4 — Time horizons

Risk averse? Risk tolerant? Define your risk tolerance profile based on the timing of your plans.

Figure Out Your Investing Risk Tolerance

What types of investments are there?

Cash equivalents, bonds and stocks are common investments. Your risk profile and time horizon will help you figure out how much of each you'll need to invest in.

Bonds are basically loans you make to another entity. These typically offer a medium risk and reward. Did you know bonds are loans to either corporations, municipalities or the government?

Stocks offer you partial ownership in a company. If you have more time on your horizon to weather the ebb and flow of the market, investing in companies through stocks is generally a good way to help you reach your goals.

Investing tip: Know your risk tolerance. Take a quiz to help you gauge where your risk falls, before you start investing.

Chapter 5 — Common investments

Take a closer look at three common types of investments and learn how they might work for you.

Know the Difference between Investments

Keep a healthy mix in your investments

Diversification is a great way to balance the risks in your portfolio. Diversify your holdings in each asset class and across different industries to help mitigate your investment risks.

Investing tip: Diversified portfolios have a mix of different types of assets and should align with your risk profile and time horizon.

Chapter 6 — Diversification

Check out the benefits of diversifying your portfolio and why it’s important.

Keeping Your Investments Diversified

Put the pieces together

Your portfolio is a term for where all your investments are for you to review, manage and adjust.

Portfolios include of mix of stocks, bonds, and cash equivalents. Stay in line with your risk tolerance, what you're experiencing in the market, and the help of a professional to help you build, modify and maintain your portfolio.

Investing tip: Portfolios take time to build, so don’t be in a rush.

Chapter 7 — Building your portfolio

Get more sound guidance about building a portfolio with a good mix of asset classes.

Building Patience and a Portfolio

Securities distributed by State Farm® VP Management Corp.

Securities are not FDIC insured, are not bank guaranteed and are subject to investment risk, including possible loss of principal.

State Farm VP Management Corp. is a separate entity from those State Farm® and/or unaffiliated entities which provide banking and insurance products.

Bonds are subject to interest rate risk and may decline in value due to an increase in interest rates.

Neither State Farm® nor its agents provide tax or legal advice.

Diversification does not assure a profit or protect against loss.


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