M1 Finance

Investing Ideas and Tips For Beginners (2021)

The best beginner tips for investing in stocks and ETFs in 2021. New investors ideas for investing in the new year.

2021 New Year’s Resolutions for Finance and Investing

It’s that time again, and this year, thank God. 2020 is finally gone, and a new horizon is dawning. Now is the time to make some New Year’s resolutions to update and improve your life. Besides the typical resolutions like losing some weight and quitting smoking, there are several goals you can make now to improve your financial picture for 2021.

Review Analyst Recommendations for Current Holdings

It’s always a good idea to periodically review analyst ratings (and trade recommendations) for your current holdings as grades can and do change. A good time to do this is the first quarter of the new year, as data on the previous year will be readily available.

Third-party ratings are available from a wide variety of sources online. Morningstar, for example, publishes its rankings for mutual funds and ETFs free of charge. A Premium membership will give you details on the analyst’s full analysis, and it will also open up access to price targets on stocks.

If there have been significant changes to the ratings on your current holdings, consider buying more (if a grade has gone up) or selling a security (if a grade has gone down). Using free information available online from multiple analysts, it will be quite easy to find replacement securities.

Max Out Contributions to Your Retirement Accounts

The contribution limit in 2021 for Individual Retirement Accounts will be $6,000 ($7,000 for savers over 50 years old). For 401k plans, the employee limit is $19,500 with a generous catch-up bonus of $6,500. Combined with employer matches, the contribution limit is $58,000 ($64,500 if you’re 50 or older).

Although it’s too late to make any 2020 contributions to a 401k plan, you can still make 2020 contributions to an IRA. You have until April 15, 2021, so don’t delay.

Reduce Your 2021 Taxes

With the right strategies, you could see your tax bill drop for 2021. Before you sell any asset, be sure to consider the tax consequences for doing so, and try to only sell after fully considering those consequences.

For example, by adopting tax-loss and tax-gain harvesting techniques, you could see your capital gains bill reduced or eliminated completely. Or net capital losses could reduce your taxable income or be carried forward to future years.

Donate to Your Favorite Charity

Associated with the previous resolution, you could also donate to your favorite charity in 2021 and pick up a tax deduction. Uncle Sam will give you a nice tax break (with limits of course) on any contributions to 501(c)3 organizations. Be sure to verify a group’s 501(c)3 status using the IRS’s online database before writing a check.

The IRS has a deduction ceiling of 20 to 50% of your adjusted gross income, depending on how your contributions will be used by the receiving organizations. For more details, consult with a qualified tax professional.

Set up Periodic Deposits

To increase the odds that you’ll invest more of your savings in 2021, you could establish recurring deposits into a securities account. Brokers like M1 Finance provide this convenient service.

To turn on autopilot deposits inside an M1 Finance account, click on the TRANSFERS link at the top of the M1 website. Next, click on the yellow Move Money button. On the next page, click on the Recurring Transfer link.

M1 Finance Periodic Deposits

In the form that follows, you’ll be able to set up a recurring transfer schedule. Your on-going deposits could be weekly, semi-monthly, or monthly.

Open M1 Finance Account

Open M1 Finance Account

Sign up for Recurring Stock Purchases

M1 Finance will also allow you to make recurring purchases of your favorite stocks. When you enroll in periodic stock investing, not only are you putting money into your favorite shares every month, but you also get additional shares whenever the price is low. This is called dollar cost averaging.

Make the Right Investments for 2021

There’s no better New Year’s resolution than to pick the right assets for your portfolio. While every year is hard to predict, we can make some confident forecasts for the next 12 months:

(1) There will be multiple coronavirus vaccines, and these will help to flatten the curve.

(2) Interest rates will remain low until the Fed starts raising its benchmark rate, which probably won’t be until 2022 or later.

(3) Stocks that were hit hard by the 2020 pandemic (like the airlines, hotels, and similar hospitality companies) will continue to struggle until the economy makes a full recovery.

There are many free stock reports available online from multiple sources. They can provide trade recommendations with price targets to make your stock picking easier.

After you set your resolutions, remember that every stock market year will inevitably be full of surprises and volatility. So proceed with good judgment.

A Transfer to M1 Finance May Be the Right Move in 2021

A brokerage account at M1 Finance will make it easier to accomplish many of the resolutions mentioned in this article. Even better, M1 accepts incoming ACAT transfers, so moving your current investment account to M1 is quick and easy.

M1 Finance Promotion Offer

If you plan to borrow any money in 2021, M1 Finance offers a low-cost margin borrowing program that costs just 3.5% per year, which is quite a bit lower than many other firms are currently charging.

And with cash bonuses, M1 can sweeten the deal for you. Just move $10,000 into your new account and you’ll earn $40. For a transfer valued at $2 million or more, M1 will deposit $3,500 in your account. Nice.

To get started, just head over to M1 Finance’s account transfer page and follow the simple instructions. You’ll be able to automate your investments with fractional shares in no time.

Open M1 Finance Account

Open M1 Finance Account