Starting early, paying down debt, and watching out for scams – finance professor answers your questions

You’ve got your first job fresh out of college, and with it comes a whole slew of adult-feeling moments, obligations, and responsibilities. It can be scary and confusing. But one thing that isn’t scary, says Assistant Professor of Finance Dan McKeever, is thinking about retirement. 

Where should new investors begin? Should you pay off student loans before investing? And what are some red flags of a financial scam? McKeever answers these questions and more in the latest episode of Faculty Help Desk. Here are a few highlights.

1. What should a new investor buy?

For students and beginners wondering what to buy, his answer is “all of them,” a big, broad, low-cost index fund. His advice also stresses starting as early as you can and only with what you can spare. “The longer that you can spend participating in the stock market – especially if you can avoid touching it – the better off you will be,” McKeever says. 

2. What investing mistakes should beginners watch out for?

Patience is key. But McKeever also warns against “selling your winners and holding your losers.” Young or beginner investors should avoid this mindset of selling good-performing stocks to cash in and selling poorly performing ones, as it can skew a portfolio and cause it to underperform.

3. What are financial scam red flags?

McKeever also stresses the importance of being vigilant against scams and keeping an eye out for red flags: investment complexity, unclear returns, and promises of rewards with no risk. “If somebody tells you they have an investment that gives you all reward and no risk, your red flags should be going up,” he said.

Watch the full episode

Check out the latest episode of Faculty Help Desk, where McKeever answers student questions about investing apps, AI stocks, and other advice for newcomers to investing and finance.