3 simple things I wish I knew before I started investing 

Investing and financial literacy of U.S. adults isn't the best. These investing tips may help.

Ultimately, time in the market, the true meaning of diversification, and knowing how taxes impact your returns are just a few things I wish I had known before I started investing. 

Let’s be honest, financial education in America isn’t where it should be. The 2023 TIAA Institute-GFLEX Personal Finance index revealed that 48% of the 28 basic money questions were answered correctly by surveyed Americans. 

TIAA has conducted the survey since 2017, and since its induction, this percentage of correct answers has averaged around 50%. 

In an S&P Global FinLit Survey on literacy rates around the world, the countries with the highest financial literacy rates are Australia, Canada, Denmark, Finland, Germany, Israel, the Netherlands, Norway, Sweden, and the United Kingdom, where about 65 percent or more of adults are financially literate. 

For the United States, the following is the distribution of correct answers to the P-Fin Index questions from 2017 to 2023:  

Investing and financial literacy of U.S. adults from 2017 to 2022.
Investing and financial literacy of U.S. adults from 2017 to 2022.

Additionally, a report from the National Financial Educators Council estimates that shortfalls in financial literacy may have cost Americans $436 billion in 2022. In NFEC’s 2017 survey, 25% of surveyors said they have lost more than $30,000 in a lifetime due to financial knowledge mistakes.  

Thankfully, I haven’t made a $30,000 financial mistake, but I’ve made my own version of mistakes along the way with my own finances. The following three things are investing aspects I wish I knew when I started my investment journey at 22 years old. 

Don’t get caught up in timing the market. Instead, time in the market is what matters.  

To invest or not to invest in bear or bull markets? That is often the question for those trying to time the market. It’s tempting to buy low and sell high or to invest in one IPO because you think it’ll be the next Apple, Microsoft, or Google. I’m here to tell you, consistently predicting market movements is extremely challenging, if not impossible. Instead, focus on long-term investing and the power of compounding. The key is to stay invested over time, and you can benefit from market growth and ride out temporary downturns. 

When it comes to investing, time is your greatest ally. The longer time you invest, the more time your money is allowed to grow thanks to the power of compounding. Starting early gives you a significant advantage because compounding returns can work their magic over a longer period. Even small, regular contributions can make a significant difference over time. Don’t underestimate the power of consistent, long-term investing.

Additionally, there are new products in the market that not only allow you to invest in the market but also keep your initial deposit secure without the risk of it being lost to fluctuations in the market. Save’s Market Savings is a unique savings product that allows you to earn a high-yield return on your savings by investing in diversified multi-asset portfolios consisting of stocks, commodities, bonds, and other assets, all while your initial deposit is safe and FDIC-insured.† With a Market Savings 1-year term, you can earn 8.96% variable APY* on your savings, which is almost double the APYs of the best high-yield savings accounts.  

Save Market Savings is a great option for those who are looking for a higher yield on their savings without any risk to your deposit. By investing in Save’s diversified portfolios, you have a higher return potential from your savings while still maintaining a level of safety and security. 

Learn the true meaning of diversification 

Diversification in investing refers to the strategy of spreading investments across different assets or asset classes to reduce risk. The goal is to create an investment portfolio that is not overly concentrated on a single investment, asset class, or sector, but rather diversified across various investments that have the potential to perform differently under different market conditions. 

By diversifying, investors aim to smooth out risk events in a portfolio so positive performance neutralizes the negative, and hopefully gives the portfolio a better overall performance. Different assets or asset classes may have varying levels of risk and return potential. For example, stocks, bonds, real estate, and commodities are all different asset classes, each with its own risk level and return characteristics.

Here’s an example to illustrate diversification: 

Let’s say an investor has $100,000 to invest. Instead of putting all the money into a single stock, they decide to diversify their portfolio across various asset classes. They allocate $30,000 to stocks, $30,000 to bonds, $20,000 to real estate investment trusts (REITs), and $20,000 to a commodity-based exchange-traded fund (ETF). 

By spreading their investments across different asset classes, the investor is less exposed to the market risk of any one investment. If one stock in their portfolio performs poorly, the impact on the overall portfolio is limited because the other assets may still perform well or remain stable. This diversification helps to reduce the potential for significant losses and provides the opportunity for more stable returns over time. 

Market Savings combines the safety of bank deposits with the growth potential of the market thanks to FDIC insurance and the diversification found in each Save portfolio. Currently, Save has four active portfolios customers can choose from, which include: 

  • Global Diversified Markets portfolios  
    The Global Diversified Markets portfolios utilize a sophisticated rules-based investment approach that captures returns across a wide range of asset classes and regions, seeking to maximize the consistency of returns. 
  • ESG portfolio 
    The ESG portfolio utilizes the same investment techniques as the Save Global Diversified Markets portfolios and maintains a similar global multi-asset class approach, while utilizing ESG-focused ETFs where possible and avoiding certain assets. 
  • Global Multi-Strategy portfolio 
    The Global Multi-Strategy portfolio seeks to generate returns across market regimes by combining 6 sub-strategies, built using a cutting-edge quantitative approach that exploits how financial markets respond to themes and patterns, or ‘narratives.’ 
  • S&P 500 Risk-Controlled portfolio 
    The S&P 500 Risk-Controlled portfolio follows the S&P 500 Index and adjusts the level of exposure upward or downward daily to maintain a stable level of volatility. 

It’s important to note that diversification does not guarantee market returns or protect against all losses but it reduces drawdowns and you’d likely have higher, long-term returns. The beauty of Market Savings is that your initial deposit is secured and never used to invest in the market.  

Take advantage of tax-beneficial accounts2

Retirement accounts linked to market returns, such as 401(k)s and IRAs, offer significant tax advantages that can enhance your investment returns. About 52 percent of private U.S. workers had access to an employer-provided defined contribution plan, such as a 401(k), as of March 2020, according to the Bureau of Labor Statistics

Contributions to these accounts are often tax-deductible, and earnings can grow tax-free or tax-deferred until withdrawal. By maximizing your contributions to retirement accounts, especially if you have an employer match contribution, you can potentially lower your tax liability and accelerate your savings growth. Though, keep in mind that there are typically rules and contribution limits for each type of account. 

Again, this is when time in the market, not timing the market comes in handy again. When you invest on a regular basis, you’re harnessing the power of compound interest on each investment. This can boost your investment returns in the long term.  

Investing can be a fulfilling and profitable endeavor, but it’s crucial to approach it with a clear strategy and a long-term perspective. Avoid trying to time the market, as it often leads to underperformance. Instead, focus on consistent, long-term investing and take advantage of the power of compounding. 

Additionally, make the most of tax-advantaged accounts to optimize your investment returns. Remember, investing is a journey, and with the right approach, you can increase your chances of achieving your financial goals. 


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