How Should a 25-Year-Old Start Investing?

Just get started. This is the advice many Boomers will give to their millennial counterparts, when discussing investing. As with anything, starting small and building an experience over time is certainly the way to go.

After all, as many might say, “if I had started when I was your age” is something young investors certainly don’t want to say in their middle-age years.

So, where to start? Well, I guess the answer is “it depends.” If one has the time, money, inclination and enough knowledge of the markets (that’s why you’re reading this, I presume), then perhaps taking a stab at picking stocks and going through portfolio design is for you.

For those who don’t want to spend the time and energy needed to put together a portfolio that will at least perform on par with the overall indices, and don’t want to bother with the tax implications, stresses, and learning curve associated with such a strategy, I’d recommend taking a look at various passive investing strategies.

For passive investors, Baystreet.ca has excellent literature on exchange traded funds (ETFs) and all sorts of information on passive investing strategies.

My personal take and perspective on investing, being far from retirement myself, is that young investors should start passive; that is, buying ETFs or funds for their primary holdings in retirement accounts.

This will provide the diversification needed to steer clear of having too many eggs in one basket, but should also provide decent growth. Then, as one gathers more knowledge on various companies and want to pick stocks, adding in some actively managed positions along the way isn’t a bad idea.

Invest wisely, my friends.