How to invest

BLK® Basics

Investing can be a great way to help grow your money. In today’s economic environment, it’s unlikely that savings alone will be sufficient to support your financial goals. But investing has the potential to protect your wealth and help it grow over time. And that means you’ll have more economic power in the future.

 

Learn how to:

 

When should I start investing?

If you invest now, you’ll have a better chance to realizing a return on your investment. According to the Social Security Administration, Social Security benefits will only cover about 33% of the cost of the average American’s retirement. The rest will have to be filled in by personal savings and return on investments.

There’s more to invest for than retirement. Investing can also help you buy a home, travel, start a dream project or even pay your bills in the future. If you invest in the stock market, you’ll have a better chance of watching your investment grow over the long term. And if you invest in bonds, you can benefit from a steady stream of income.

Investing is a long-term venture. Short-term profits are elusive – and often illusory. The longer investment horizon you’re willing to cultivate, the better chance you will have to realize extended annualized returns on your investments.

When you’re at different stages of your life, you will likely have different investment goals. When you’re young and have most of your earnings years ahead, you may want to build up capital to safeguard your future. Later, if you get married and have children, you may prioritize supporting your family as well as planning for your children’s college educations. As you get older, you’ll likely focus on financing your retirement. When mapping out your investment plans, consider which primary goals you want to focus on at your current age.

How do I build an investment strategy?

Just as you can’t build a house without a blueprint, you should formulate a strategy before you start investing. First, set aside some money to invest in your future. Begin investing now and educate yourself so you can take the calculated risks necessary to get a desirable return on your investment. Here are some questions to consider:

  • How much money am I willing to invest?
  • What kinds of investment vehicles would work best for me?
  • What kind of asset allocation should I choose? How should I balance my investments and protect against risk?
  • What sectors are the most attractive right now?
  • Am I particularly interested in investing in a specific geographic area?
  • Am I interested in socially responsible investing?
  • What’s my risk tolerance? If I incur losses, when I should change direction?

What are some popular investment options?

Popular investment options today include stocks, bonds, mutual funds and ETFs, which are all registered with the U.S. Securities and Exchange Commission (SEC).

  • Stocks are shares in the ownership of a company. Also known as equities, they’re heavily regulated by the government and most can be bought and sold on stock exchanges.
  • Bonds are based on debt, and they’re created when an investor loans money to a company or governmental entity to finance projects and operations. They’re known as fixed income instruments because typically they pay out a regular (fixed) amount (income) to investors.
  • Mutual funds are investment funds that take money from many investors and put it into stocks, bonds, money-market funds or other securities or assets. When you buy a mutual fund share, you own a piece of the fund’s investment portfolio.
  • Exchange traded funds (ETFs), like mutual funds, are invested in stocks, bonds, money-market funds or other securities or assets, but investors don’t own direct shares of these funds. Only authorized participants (financial institutions who double as broker-dealers) own direct shares of these investment funds. But these authorized participants in turn offer shares to investors that can be bought on a stock exchange.

To learn about the net asset and issuance flows of mutual funds and ETFs, visit the Investment Company Institute.

How much do I need to start investing?

You can invest in an ETF for less than $100, while mutual funds often ask you to invest at least $1,000. A share of stock can range in price from a few dollars to several thousand dollars. Mutual funds and ETFs can be wise long-term investments; since they both invest in many companies, risk is spread out and you’re exposed to a wider range of asset allocation.

How to invest with BlackRock

At BlackRock, we partner with financial professionals across the United States to ensure they have the proper tools and materials to assist you in building a financial plan and investment portfolio suited to your goals. Because BlackRock doesn’t employ financial advisors, we strongly encourage you to work with a financial professional.

How to find a financial professional

If you currently don’t have a relationship with a financial professional and want to get started, search for a financial professional in your area using FINRA’s BrokerCheck®. BlackRock doesn’t endorse or recommend any specific firm. Depending on where you live, there may be local or national firms better suited to assist you in your investment decisions.

What should I discuss with a financial professional?

Once you’ve connected with a financial professional:

  • Discuss your financial goals. It’s important to discuss where you’re headed in your investment journey. That way, your advisor will know the best way to help you attain your objectives.
  • Explore the full spectrum of BlackRock investment solutions best suited to your portfolio. You might find a new financial instrument that can help meet your needs or learn more about a solution through further research.
  • Be sure to read each fund's prospectus prior to investing. Know what you’re getting into before you invest your money, whether it’s in stocks, bonds or an investment fund. Special terms and conditions might apply; read the fine print so there are no sudden surprises later.

How to open a BlackRock account

  • Select the appropriate application to open your BlackRock account, such as opening an investment account. If you don’t see the form or application you need, please contact us.
  • Complete your application, review it with your financial professional, and send your check (made payable to "BlackRock" or "BlackRock Funds") and application to us at the address on the application. Once we establish your account, we’ll send you a confirmation statement detailing your account number and confirming your investments with us.

How to consider investing decisions

When you’re considering your options for investing with BlackRock, either through a financial professional or direct access, it’s important to consider the benefits associated with each option.

Review this investing checklist before you make your final decision:

  • Do I have an investment strategy?
  • Do I have an investment budget?
  • Have I weighed my available options? Have I considered the full range of investment solutions?
  • Do I understand both the risks and rewards associated with a particular investment?
  • What’s my risk tolerance? How much am I willing to lose?
  • Have I read the prospectuses of the products I’m interested in investing in, so I understand all of the ins and outs?
  • Have I discussed any ideas or concerns I have about investing or about a certain product with an investment professional? Did I take notes during the meeting for future reference?

Before you invest, it helps to prepare. Below are links to financial industry resources that will supply you with:

  • Background information on investing with mutual funds
  • The latest industry statistical trends regarding various types of funds, including mutual funds and ETFs
  • Information on working with a financial advisor

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