Younger and less established investors have every reason to play it safe. The stock market always seems to be doing a bit of who-knows-what, and even the good management options require further scrutiny every time they pop up. The temptation to go really conservative with your investment strategy is a strong one, but without good advice, you could be doing yourself a real disservice.
Business researchers at the University of British Columbia have just released a study with a slightly unnerving conclusion: If you're a newbie on the stock market and you're setting out on your own, making uninformed decisions could wind up worse for you than choosing stocks "at complete random."
Video of the Day
Of course, we've heard ad nauseum that it's key to diversify your holdings. That's not as simple a proposition as it sounds, however. "An amateur investor might buy stocks in lumber, mining, oil and banks, and believe they are diversifying because they're investing in different companies and sectors," said coauthor David Hardisty in a press release. "But because all of those equities tend to move in unison, it can be quite risky, because all the assets can potentially plunge at the same time."
This is why knowing who to ask and how to research is so important. Millennials have their own priorities when it comes to assembling a portfolio, but no matter how risky you find the investing process, make sure you get yourself and your money off to the best and most informed start possible.