The 6 Best Investments For Beginners According To The Pros

Long-term wealth doesn’t come from wishful thinking. You need a strategy, a way to build step by step. Investing is a key part of any successful plan. 

The sooner you start investing, the better. But where to begin? That’s a question undoubtedly top of mind for those new to investing. The myriad of options can seem overwhelming.

Index funds follow the performance of a broad market index, such as the S&P 500. Because they are diversified, they carry less risk and have returned a consistent amount over time. Their great advantage for the investor is that they require only very low management, and a newbie investor can invest a small sum and reap the benefits. 

“It’s a simple way to get broad market exposure without betting on single stocks, which can feel like a gamble, especially now,” says Jenna Lofton, a certified financial planner and founder of Stockhitter.com.

There’s something to be said for investing in real estate.

“It’s ideal for new investors because it’s familiar, a concrete investment that gives them a chance to build wealth with low risk compared to the stock market,” says Shirley Mueller, founder of VA Loans Texas. If you’re not ready to buy a property outright, consider real estate investment trusts (REITs). 

REITs allow investors to access a diversified portfolio of income-generating real estate, from commercial spaces to apartments, while requiring a much smaller upfront investment.

“For those with a modest starting budget, REITs are a strong alternative, as they provide access to high-quality properties and professional management without the hands-on responsibilities of ownership,” says Mueller.

If you’re just getting started investing and want some safety, the U.S. government issues securities —treasury bills, notes, and bonds.

“These instruments are the safest because they have the government's complete backing,” says Christopher McGlynn, a certified financial planner and consultant for COMPACOM.

He says the potential upside is the low-risk and highly stable returns. Then, too, with interest rates up lately, Treasuries are offering decent returns compared to a few years ago, points out Lofton.

Certificates of Deposits (CDs) are time deposits offered by banks with fixed interest rates and maturity. “They are suitable for beginners because they offer better returns than savings accounts, and FDIC insurance is available,” says McGlynn.

There is a certain level of comfort in knowing how much returns you’ll get because it’s guaranteed if you keep your CD for the determined period. 

Robo-advisors are automated investment platforms that manage a diversified portfolio based on your risk tolerance and financial goals.

“They are ideal for beginners with limited time or knowledge about investing because they handle everything, from rebalancing to tax optimization, at relatively low fees,” says Quigley.

Exchange-Traded Funds (ETFs) operate similarly to index funds and are bought and sold on exchanges throughout the day, just like stocks. 

“Many beginner-friendly ETFs focus on stable sectors, such as utilities or large-cap companies, providing a balanced mix of safety and growth potential. ETFs are cost-effective, provide immediate diversification, and are highly liquid,” says Brian Quigley, founder of Beacon Lending.