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Actionable ways to crush your investing goals

Stock market bull

This article was written by Charles Qi. More on Charles can be found below the article.

As an experienced investor, I come across people asking me for actionable steps to start building a portfolio daily. Many have wanted to participate in the stock market for years, but they remain on the sidelines for various reasons. 

If you are one of these people who would like to become knowledgeable about investing but feel that something is holding you back, I understand your concerns. Many would-be investors are intimidated by the vast quantity of information they encounter as they attempt to break into the field. Some hold back because they are fearful of making mistakes. Others decide not to invest because they believe that investing in the stock market is limited to the rich. Maybe these barriers were real deterrents in the past, but the resources you need are available today. 

As an investor with more than ten years of experience at one of Canada’s top investment banks, CIBC Capital Markets, I am here to help. In my role as Executive Director and Quantitative Investment Strategist, I oversaw over 1 billion Canadian dollars in institutional assets. I learned a lot through a decade of observing traders on the floor. I watched the systematic, intentional way professional investors managed funds. On the other side, I saw how arbitrary decisions made by retail investors often led to unpredictable and stressful outcomes. I believe that, with knowledge and experience, anyone can enter the world of investing successfully. 

In this article, I will share my tips for the first actionable steps you can take as you enter the world of trading and finance. I will also tell you how to turn those first steps into a successful lifelong journey.

Why investing is important

Put simply, investing is the fastest way to grow your wealth. Today’s record-high inflation may be eroding your savings and contributing to feelings of financial stress or uncertainty. Over time, we pay more for everything, including gas, clothing, and food. Inflation makes money worth less with each passing year. However, with prudent investing, you’re better equipped to combat inflation by helping your money grow rather than shrink.  

That’s because investing increases wealth through a process called compounding. As your investment makes money, you can reinvest those returns and make additional money. Over time, compounding has a snowball effect as the amount you reinvest grows, and you earn even more. Compound investing is a long-term play, so the sooner you get started, the greater your benefit will be.

New to the stock market? Focus on building your financial literacy

As a new investor, you may doubt whether you know enough to make sound financial decisions in the stock market. If this is the case, your caution is wise. Breaking into this field should not be taken lightly. It requires experience and expertise. The best way to learn is by watching people who already know the ropes. Your goal should be to find people who are successful and learn everything you can from them. But where do you find these people?

Before the internet arrived, learning about the stock market was challenging. New investors picked up information from the people around them or scoured newspapers and books. As the internet emerged, new investors discovered a boundless source of information. In many ways, learning about investment strategy became a whole lot easier. But finding information online also gave rise to new challenges.

The web accumulates more information every day. Often, the vastness of this electronic library can feel overwhelming. Googling a straightforward question on investing pulls up hundreds of pages of answers with potentially billions of results. Bombarded with information, new investors may have difficulty deciding where they should start. 

One strategy is, to begin with, reputable websites. In the investing world, Motley Fool and The Street are popular sites with well-researched, current information. These sites compile accurate and high-quality information. Unfortunately, however, the articles on these sites are often geared toward seasoned investors. Their “alphabet soup” of acronyms, ever-changing graphs, and professional jargon can discourage those new to the field.

Of course, the internet is also full of investing information explicitly produced for new investors. In recent years, TikTok, YouTube, Reddit, and Discord have become prominent sources of information for newcomers to the stock market.   

A word of caution on using social media to learn investing: these sites are a mixed bag. Because these sites are primarily designed to entertain rather than educate, quality can vary depending on who is presenting the content. While it’s true you can find helpful, reliable content, there’s also a lot that isn’t. Anyone can post content — none of it needs to be reviewed or fact-checked. As such, new investors must somehow verify the accuracy of all the information they find online. 

However, encouraging people — especially those in younger generations — to seek information elsewhere can be challenging. That’s largely because many young people became interested in investing through these platforms, so they continue to use them as a primary source of information. Many investors have followed unreliable advice, only to lose significantly in the last couple of years. 

It’s not all doom and gloom, though. Contrary to what many people think, you don’t need to obtain an advanced degree, get a formal education in finance, or work in an investment firm to understand the basics of the stock market. Here are a few places new investors like yourself can find the information to get started.


If you like to read, my favorite book on the stock market is “One Up on Wall Street” by Peter Lynch.


Motley Fool has a series on investing for beginners that will help you learn the basics. 


There are many new ways to learn about investing now. You can read books, watch YouTube videos, or even use apps. Here are a few apps that offer trustworthy, data-backed investing education and market insights:


Invstr’s Fantasy Finance tool gives you a practice $1M portfolio to manage, so you can learn the market and sharpen your skills without risking real money.


Finimize summarizes the top financial news and insights in audio, video, and text form through a paid subscription.


Betterment is a robo-advisor with tools to help you build a personalized plan for saving goals and retirement. 

New investors need to confront psychological barriers before entering the stock market

If you are like many new investors, one final barrier you will have to overcome before you can start investing and earning returns is your fear. Most humans are acutely aware of the risk, which is perhaps most true in the stock market. When it comes to investing, there are high stakes tied to every decision you make. The money you are investing is real and is likely savings you have carefully built up over time. While investing is compelling, you want to grow your money by investing it wisely, but you may feel uneasy because of stories you’ve heard about people who went about this process the wrong way and paid the price. 

As an experienced investor with a degree in computational finance from Carnegie Mellon University, I understand your hesitation. That is why I choose to approach the stock market highly methodically. 

Approach investing with a structured approach

I aim to introduce structure, reduce anxiety, and improve investment outcomes through education. I’ve seen so many investors make decisions randomly. They put a lot of money into investments without weighing the necessary factors. This approach inevitably leads to outcomes that are unpredictable and financial goals that go unmet. That approach to investing is, in a word, stressful. 

Avoid taking on too much risk

New investors tend to make the most common mistake of taking on too much risk. They come to the market with money they have saved. Due to their excitement, they may simply pick stocks randomly or put most of their money into one stock based on a friend’s advice or online tips. Starting this way is incredibly risky. If they lose their initial investment due to a lack of education, they will no longer have the funds they need to meet their financial objectives.

On the other hand, a common mistake of new investors is not taking on enough risk to generate returns. Individuals who do not take on enough risk put their money into savings accounts or CDs. Believe it or not, this is also risky behavior and can hinder you from achieving your financial objectives. People who take on too little risk will also be unable to generate the returns they need to meet financial goals. 

Overcoming your fear of investing happens when you realize that a good strategy is not random. Successful investors are not lucky — they have taken the time to learn a unique skill. Becoming educated in this skill is a process. You need successful investors willing to teach you and a growth mindset that prepares you to learn. 

No one-size-fits-all strategy can enable you to learn everything you need to know in a month. Your investments will be uniquely personalized to your circumstances. Everyone has different financial needs and investment objectives. People who want to invest, but are not interested in putting in the effort to learn, often hire investment advisors or robo-advisory services to manage their investments using computer algorithms. However, if you want to retain control and be the decision maker, gaining knowledge is the only way to improve your investment outcome. There is no shortcut to success in this field, but every bit of new knowledge and experience you gain from reputable sources prepares you to take your first actionable steps. 

Step 1: create your investment policy statement

When you’re ready to start investing, I recommend you take three practical steps: form a personal investment policy statement, open a trading account, and then start investing.

A personal investment policy statement may sound formal, but it’s simply a statement that boils down to your investing goals, risk tolerance, and portfolio management approach. Before investing, you will want to clearly define your feelings about each of these parameters. Ideally, this plan will let you start thinking long-term and clarify your financial objectives. It will give you direction regarding allocating your savings among different asset classes. It should also provide you with insight into the investments you select. 

Start by considering your financial goals. What do you want your money to do for you? Why are you investing in the first place? 

Another critical thing to consider is your time horizon for each goal. In other words, how much time do you have to invest before those goals need to be met? For example, are you preparing for retirement or trying to earn money for a vacation next summer? If your time horizon is short-term, investing may not be the best way to meet that goal. 

Investing is ideal for long-term goals. Suppose you want to build a portfolio that generates $5,000 per month and provides a comfortable retirement. In that case, a financial calculator can help you determine the amount you need to set aside and the compounding rate you’ll need to earn as you go. 

Next, you should evaluate your risk tolerance. Different people prefer different levels of risk. You will find investments ranging from conservative to aggressive and everything in between. Conservative investments tend to grow money slowly but are incredibly safe. Aggressive investments offer high returns quickly but have difficult to predict outcomes.  

All investments come with some level of risk. The market constantly moves up and down, but some stocks are far more volatile than others. Understanding your risk tolerance, you will learn how comfortable you are with risk and market fluctuations. For many people, sleeping well at night without worrying about the market is more important than growing money a little faster. 

The last part of writing a personal investment policy statement is defining the actions you will take to maintain your portfolio. For instance, how often will you evaluate your portfolio to see if you hit your compounding interest goals? What philosophy will you use when adding new securities to your portfolio? How often will you rebalance your holdings to see if your strategy is effective? Each of these questions should be answered before you make your first investment. 

If you find it difficult to answer some of these questions on your own, it might help to speak with both professional and retail investors. This can help you see the process from many angles. The more teachers you have, the less likely you are to miss something or make a mistake. 

Step 2: open a trading account

After finalizing your personal investment policy statement, your second step as a new investor will be to create a trading account. You need a trading or brokerage account to buy, sell, and trade on the stock market. Your new account must be registered with a stock broker or a firm. You can easily find brokerages through online searches or by asking friends or trusted professionals.

A trading account is used to buy and sell any type of security, including stocks, bonds, mutual funds, and ETFs. You will sometimes see these accounts referred to as taxable accounts. This is because investment income within a brokerage account is subject to capital gains taxes.

Brokerage accounts offer a wide range of services. Some expensive trading accounts provide full-service stock brokers to advise investors. Other lower-cost online accounts are less hands-on.

Like your banking account, your trading account will allow you to transfer money into and out of it whenever you wish. However, unlike a savings or checking account, this brokerage account will give you access to the stock market and other investments. 

Many brokers enable you to open a trading account online, and the process is quick and easy. Typically, you do not need much money to open an account. Few brokerage firms allow you to start an account with no deposit. Before you purchase your first investment, you will need to transfer funds into your new trading account. You can move money directly from your checking or savings account to the brokerage account.

You own all of the money and investments in your trading account, and you can sell your assets anytime. The broker holding your account simply acts as an intermediary or middleman between you and the stock market.

There are no restrictions on how many trading accounts you can open or how much money you deposit into these taxable accounts each year. You also should not encounter any fees when opening your new brokerage account. 

Step 3: select specific investments

After a trading account, your third and final step is to select specific investments. As you consider where to start, keep the first rule of investing in mind: diversify. Any accredited investor will be the first to warn against placing all of your eggs in one basket. You can significantly reduce your investment risk by spreading your funds across a wide range of investments. 

Like many seasoned investors, you may allocate between 20% and 40% of your portfolio to high-quality, blue-chip stocks. These stocks are from well-known, established companies with reliable histories of performance. While they may seem uninteresting initially because they don’t grow as quickly as others, the dividends these stocks pay can boost your compound earnings. Additionally, these stocks are often worth more after 10 years despite the market’s volatility. A portfolio grounded in blue-chip stocks provides peace of mind and does the job. 

If you don’t have the time to learn about all the particular stocks, you can explore Exchange Traded Funds (ETFs), also known as Index Funds. These low-cost options invest your money into 100s of companies with dedicated Fund Managers with deep expertise. They provide a more accessible and lower-risk means of investing in the stock market. 

Keep in mind that your knowledge or expertise should not drive your investments. Sound investment decisions are based on your goals, resources, and risk tolerance. No one has time to become an expert in everything, but as your knowledge deepens, you may select one area to develop your expertise. By doing this, investors can generate additional returns and enhance investment performance.

The best investors are life-long learners

Your learning as an investor will never stop. Keep looking for quality information that will enable you to grow. Know that understanding even a single company can take a long time. There are professionals whose entire careers have been spent covering a couple of companies. Becoming a good investor involves a mentality of life-long learning.

Like any education, consistency is critical. With the market constantly evolving, you must ensure you are learning a little bit every day. As a new investor, you will build on your foundational knowledge with new information as often as possible.

Finding the time to gather new information regularly is tricky. When new investors have to search for that information daily, many lose interest and give up. If you are committed to being a lifelong learner, make it easy for yourself. Sign up for an app or newsletter that delivers regular notifications about learning opportunities. This simple action can help you stay on track for the long haul.

To sum it up, you should treat investment strategy as a life-long skill. The more you learn, the more accurately you can read the financial market. So, start by learning everything you can.

As you build your portfolio, focus on your goals and risk tolerance instead of your returns. Seek out experts you can trust. Getting information from reliable sources will be your best protection against bad investing advice. Do your research, make your decisions, and stick to your plan. Don’t allow yourself to get cold feet or become anxious as the market fluctuates. Trust what you have learned and continue to deepen your knowledge and experience for years to come.

Charles Qi is the CEO and Founder of StockPick, a video-based investing social network for retail investors. Charles is a CFA Charter holder and holds a Master’s Degree in computational finance from Carnegie Mellon University.


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