If you are looking to invest each month into a portfolio, or to place a lump sum, so that you can make that money work for you and you are 20 years old then there are points that you will need to consider.
You want to make sure that you have thought about the money that you are willing to invest and the portion of that money that will need to be invested into safe guaranteed investments, like i-saving-bonds. The good rule of thumb, if you are 20 years old, keep 20 percent of your capital investment into products that are guaranteed to pay out on maturity and not to lose the capital investment.
The return from these investments might not be as great as the more risky options but it will mean that you are able to hold onto a portion of your capital if you were to lose a large chunk of your capital on a higher risk option.
You will not want to put all of your capital into one large investment but you will need to research the market and find areas that you feel will give you the best long term investment option. Do not just pick any section but think heavily towards some long term planning in those areas. You will need to split the final 80% of your capital into these areas that you are looking to invest in. It is important that you plan these areas properly and the capital is shared out in risk factor as well. You want to have a mixture, at least half of these needs to be in a medium term risk.
It is important to think that this is going to be a long term investment and any losses that you do suffer you have plenty of time to remake the capital. It is not something that you should jump into without proper research, you will need to only place capital into a long term investment if you are prepared for the money to stay there long term.
You will need to have other access to capital that you can have access to and this will not influence the need to withdraw the capital before it has had a chance to work. You are looking at the investment staying put with reinvestment opportunities within that time scale.
Even though this is a long term plan you still need to review your investments so that you can check on a regular basis that you have the correct balance of your portfolio is split into the relevant areas. So, if you periodically add money to your investments or monthly you will need to check that you can break the areas that the money is invested into fits with the plan. Otherwise you might need to tweak the areas accordingly.
This is a long term view and you must be committed to tying the investment capital up for a number of years with the minimum being at least five years, ideally you are looking for twenty or more year’s investment.