5 Best First Steps for New Investors, According to Self-Taught Pros

Everyone knows that the best way to start something is to start something. Still, we are cautious to begin a process when we aren’t sure what we’re doing and what the outcome will be. When it comes to investing, beginners tend to overthink things because of the value people place on money and the stigma attached losing it.

Invest in Gold

Thor Metals Group: Best Overall Gold IRA

Learn More

Priority Gold: Up to $15k in Free Silver + Zero Account Fees on Qualifying Purchase

Learn More

American Hartford Gold: #1 Precious Metals Dealer in the Nation

Learn More Powered by Money.com - Yahoo may earn commission from the links above.

As the host of “The Personal Finance Podcast,” Andrew Giancola invited self-taught pros Dave Ahern and Andrew Sather — the team behind the popular “Investing for Beginners” podcast and website — to his podcast to talk about trading basics and the psychology behind investing.

Read Next: How To Get a 10% Return on Investment (ROI): 10 Proven Ways

Learn More: Are You Rich or Middle Class? 8 Ways To Tell That Go Beyond Your Paycheck

Here are five best first steps for a beginner investor, as discussed by Sather, Ahearn and Giancola, and what simple actions you can take along the way to gain experience.

Establish Your Foundation

“First of all, you need to have your ducks in a row … You basically have to have your foundation set,” Ahern said.

Only a fool should start investing with too much debt and too little saved in an emergency fund. An emergency fund acts as a buffer against unexpected expenses like job loss, medical emergencies, or unexpected home, car or travel expenses.

Three to six months’ worth of savings is the rule of thumb, but it will depend on your lifestyle, monthly costs, income and dependents, per Wells Fargo. It suggested storing the funds in a bank account that earns interest.

If you’re living paycheck to paycheck, save what you can until you feel comfortable jumping into investing.

Check Out: Money Influencer Delyanne Barros: Why Boring Could Be Best for Investing

What Kind of Investor Do You Want To Be?

When starting out, you need to decide how much time you want to devote to investing and how interested you are in the learning process.

Do you want to be a hands-on stock picker or passively invest via index funding or exchange-traded fund investing? Or, if you have sufficient funds but don’t care to be actively participating, would you rather let someone invest for you? Deciding your commitment level will help control your emotional investment, according to Ahern.

Set Goals for the Long Term

Sather described investing as a “lifelong journey,” but many beginner investors get frustrated with tracking short-term inconsistencies and their effort not paying off in results. “If you can set the right type of goals in place, that helps shift your mindset and put things in perspective so you don’t get discouraged too much when you don’t feel like you’re making progress,” he said.

Story Continues

If you’re constantly looking at progress charts on your phone, Giancola suggested turning your device horizontally, so you can see a longer timeline and the upward trajectory most stocks will show.

If you concentrate too much on the ups and downs every day, you’ll drive yourself mad. And if you end up panic-selling during a down time, you could even lose money. According to Forbes, panic-selling can cause investors to lock in losses and miss the market’s highest days.

Master Your Psychology

New investors can be forgiven for watching their brokerage accounts every day; however, at some point, you’re going to have to conquer the fear or greed that’s making you be so attentive. You’re not going to win on every single investment you make, so the quicker you can learn to have an investor’s patient mind, the better.

Ahern suggested removing financial apps or stock tickers from your phone completely. Doing so causes “a speedbump,” he said. “It makes it harder for you to sit down at your computer, log in to your account, and, you know, make a decision to buy or sell something.” It’s a good way to control your emotions.

Be Patient and Predictable

You can’t learn everything right off the bat, so don’t beat yourself up over something like losing a few dollar on a wonky stock pick. The abundance of information and opinions available to the newcomer is overwhelming, but patience and predictability will serve your long-term investment strategy well.

People equate “predictable” with “boring,” but when it comes to growing your money, being predictable means that you’re starting good saving and investing habits. “At the end of the day, it’s how much money can you save and invest and put in,” Sather said. “So, that means spending less than you make and setting habits like dollar-cost averaging to put money to work for you.”

Once you’ve established some of these first steps, experiential learning will dictate what tweaks and risks you’ll can take moving forward. “You don’t have to pick the next Google or the next Amazon to be successful in the stock market,” Ahern explained. “I think you just need to really understand that it’s not going to be a fast game. If you’re looking to get rich quick, the stock market is not the place to do it.”

More From GOBankingRates

• 6 Costco Products That Have the Most Customer Complaints 

• Mark Cuban Warns of 'Red Rural Recession' -- 4 States That Could Get Hit Hard

• I'm a Retired Boomer: 6 Bills I Canceled This Year That Were a Waste of Money

• These Cars May Seem Expensive, but They Rarely Need Repairs

This article originally appeared on GOBankingRates.com: 5 Best First Steps for New Investors, According to Self-Taught Pros