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At Golden Financial Services our mission is to “provide our clients with the highest standards in debt elimination and management solutions for a debt free tomorrow”.

However once a person becomes debt free, it’s now time to save money and eventually invest. 

Hopefully after reading this post we will have helped to set you in the right direction!

For the novice investor, it is important to learn from those with experience. Identifying a financial mentor is an important way for someone without experience to quickly learn how to create a model portfolio, choose investments, and learn the patience and intelligence to manage a portfolio for maximum gain. Whether a novice investor is looking to invest for fun, meet specific financial goals, or become a professional trader, it is important to seek experience and advice.

The financial markets are not for the weak and weary. Some might say that the best advice given to people starting is for them to take a $100 bill and flush it down the toilet without hesitation. If a person can stomach this without flinching, they may be ready for the rigors of investing. An easier way to learn may be to seek out a role model.

Determine Your Risk Profile 

Before a novice investor searches for a mentor, it is best to first understand their personal risk profile. A risk profile is an indication of how much volatility or risk (potential for loss) a person is willing to accept before they sell an investment. Different types of investments carry with them a certain amount of risk and there is no such thing as a riskless investment. Equities (stocks) have an inverse relationship with fixed-income instruments (bonds); when the market is up, the value of one is down and vice versa.

There are many standard risk profile questionnaires available that ask simple questions about an investor’s attitude toward risk. One common question asks: “If the stock market lost money for a decade, how would you expect your investment to perform?” Depending on the answer, an investor’s risk level may be scored from as conservative (risk adverse) to aggressive (risk tolerant). A risk profile assessment is important, though it should be noted that any assessment of a novice investor’s risk tolerance should be balanced with a weighing of their financial goals and objectives in order to create a more multi-dimensional view of their profile.

Join an Investment Club or Group

Once a person’s risk profile is determined, it is much easier to identify a mentor who can best work with the novice investor. Matching a risk profile with a mentor who shares a similar opinion about investing will result in a much better mentor-mentee relationship than one where a mentor has a much different style. A good place to begin your search for a mentor can be through an investment club. These groups, which are formed in nearly every community, bring individuals together to learn about investments.

Some clubs will offer speakers and interactive exercises designed to increase a novice investor’s knowledge base. Participating in a club will expose them to people in the business and bring them in contact with a potential mentor.

Read Books on Investing and Share Insights with a Mentor 

Books written by noted money managers and other investment profiles can also provide a wealth of information for novice investors. These books may also provide insight on local managers and accessible investment stars who may be willing to enter into a mentorship relationship. A novice investor who takes the initiative to learn the markets, learn investing terms, and seek relationships with knowledgeable people will be able to grow and emulate the success of the mentors they choose.

Ryan Grayson is a personal finance blogger. He recently contacted U.S. Emerald Energy to learn about how invest in oil and is eager to begin this new financial opportunity.


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