Finance

How to Start Investing Later in Life With Ken Julian

Becoming an investor is a lot easier if you start early in life, but it’s not impossible to invest later in life. If you have the time and money to learn about investing, then you could be on your way to building wealth.

What follows is a Q&A with Ken Julian, EVP and Director of Client Portfolios at Halsey Investments. Ken has been with Halsey Investments since 1997 and is currently EVP of Client Portfolios.

How late can someone start investing?

It all depends on the amount of time you have to devote to learning about investments and how much money you have to invest. If an individual is young and has limited funds, they should probably stick to saving for retirement using a 401(k) or IRA and save their investing for later. On the other hand, if an individual has time on their side but has limited funds, they may want to invest in ETFs. There are so many choices out there, but ETFs are a great place to start since they will not require you to spend hours researching and managing the fund.

How do you explain stock picking to someone who is new?

If we look at an index like the S&P 500, we can see that it has gone up by 8.1% so far this year and compares that gain to the 2.1% return on a 1-year CD. If we go back five years, then stock picking would have been even more profitable at 15.3%. In comparison, if you were in a 1-year certificate of deposit, your return would be almost 0%.

Why not just invest in the index fund?

Someone may choose to avoid ETFs and mutual funds because they don’t like paying commissions. However, if you are going to pay commissions, you may have a financial advisor managing the investments. I believe that if people want to pay commissions and are just going to stick with mutual funds or ETFs, they might as well have someone else manage the account for them. This is why I like financial advisors. They make sense of all of this information so that you don’t have to spend your valuable time learning about investing yourself.

How do you explain risk to someone?

I consider the risk to be the likelihood that you will lose money on an investment. The best way to measure risk is by using something called Standard Deviation, or how volatile your investments are over a period of time. You can go to www.standardandpoors.com for this information. This is a great site, and it’s free. I use it all the time, and it makes a valuable resource for students of finance.

What’s the best way for someone to start investing?

Take a look at your expenses and figure out if you can put aside $100-$500 per month for investments. If you can’t, make sure that you are taking advantage of a company match on your 401(k) or IRA. When it comes to investing, patience and discipline are key.

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