Magazine

5 Things All Investors Need to Know

By Sallie Krawcheck

I hear from a lot of women that they think they need to be a financial expert before they get started investing. You don't. You only really need to know five basic things. That's right: Five basic things before you get started.

1. Find a fiduciary.

Number one: When you invest, work with a fiduciary. That's someone who is obligated to put their clients best interests ahead of their own. And believe it or not, not every financial services firm has to do this, but at Ellevest we think it's a no-brainer.

2. Keep costs low

Number two: Work to keep your cost and fees low. At Ellevest, we advise investing in low-cost exchange-traded funds, otherwise known as ETFs, where possible. And for a digital adviser, the management fee, the amount that adviser charges you, should be well below 1%. *

3. Diversify.

Number three: Diversify. Invest in a well-diversified investment portfolio with a mix of different types of securities. Investing in a single stock? I know you have some friend who said they made a fortune from it, but it's a bad idea ... even if you think it'll go up forever. You just don't know.

4. Change gears over time.

Number four: Change gears as you get older or closer to what you're investing in. We usually recommend shifting your investments so they're less risky the older you get or the closer you get to your goal date.

5. Don't wait. (Seriously.)

And five, don't wait to invest. I know it's easy to wait, but make it a habit. Invest a little or a little more out of every paycheck, whatever works for you and your budget. And that's why Ellevest has no minimum account size.

So, five things. Now you know.

Ellevest's fee is .25% for Ellevest Digital, 0.50% for Ellevest Premium. Fund fees are charged by the underlying fund manager, for the management of the fund. Advisory fees are charged by investment advisors, such as Ellevest, for ongoing investment advice and portfolio management for the account.

Disclosures

Ellevest's fee is 0.25%-0.50%. Fund fees are charged by the underlying fund manager, for the management of the fund. Advisory fees are charged by investment advisors, such as Ellevest, for ongoing investment advice and portfolio management for the account.

The information provided should not be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities and should not be considered specific legal, investment or tax advice.

The information provided does not take into account the specific objectives, financial situation or particular needs of any specific person.

Investing entails risk including the possible loss of principal and there is no assurance that the investment will provide positive performance over any period of time.

Diversification does not ensure a profit or protect against a loss in a declining market. There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income.

The practice of investing a fixed dollar amount on a regular basis does not ensure a profit and does not protect against loss in declining markets. It involves continuous investing regardless of fluctuating price levels. Investors should consider their ability to continue investing through periods of fluctuating market conditions.

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Sallie Krawcheck

Sallie Krawcheck is the Co-Founder & CEO of Ellevest. Her life’s mission is to help women to reach their financial and professional goals.